TOTAL S.A.

Savino Bartolomeo

Paula Biste

Mathieu Picca

Lucas Pilleri

Raffaele Triggiano

AGENDA

COMPANY PROFILE

BUSINESS MODEL NALYSIS Value preposition

Key activity

SBU

SEGMENTATION

INTERNAL ANALYSIS Resourced Based view

ESTERNAL ANALYSIS KSF Analysis Competitive Analysis Attractiveness McKinsey

SWOT ANALYSIS

STRATEGY

ORGANIZATION

COMPANY PROFILE TOTAL is one of the leading integrated oil and gas companies in the world. The company is engaged in all aspects of the petroleum industry, including upstream and downstream operations.

TOTAL is also active in the chemicals, coal mining, and power generation businesses.

Total at a glance:

Fifth largest publicly-traded integrated international oil and gas company in the world

96 104 employees.

Operations in more than 130 countries

Exploration and production operations in more than 40 countries.

Producer of oil and gas in 30 countries.

2011 sales: €184.6 billion.

BUSINESS MODEL ANALYSIS

BUSINESS MODEL

Value proposition Enable as many people as possible to access energy in a world of constantly growing demand

BUSINESS MODEL

Key Activities

Upstream

Exploration and production activities in more than 40 countries

Production of oil and gas in 30 countries.

Production: 2.34 million barrels of oil equivalent per day.

Proved reserves: 11.4 billion barrels of oil equivalent as of December 31, 2011 (2).

Refine & Chemicals

Marketing & Services

Key Activities

Downstream

No. 1 Western European Refiner-Marketer and No. 1 Marketer in Africa.

One of the leading traders of crude oil and refined products worldwide

Refining capacity: approximately 2.1 million barrels per day.

Retail network: nearly 14,819 service stations.

Sales of petroleum products: approximately 3.8 million barrels per day.

Brands: TOTAL, Elf, Elan, AS 24

BUSINESS MODEL

Key Activities

Chemicals

Total is one of the world’s largest integrated chemical producers and a leader in each of its markets - Petrochemicals and Fertilizers, Specialties

BUSINESS MODEL

BUSINESS MODEL

Summary

Vertical Integration

All activities fully integrated, advantage of sinergy effects

Total controls all stages of the value chain from exploration till the delivering of the product to the customer

BUSINESS MODEL

SBU

Upstream

Downstream

Chemical

SEGMENTATION

Oil & Gas

• Exploration, production and refining

Green energies

• R&D

• Promotion

Chemicals

• Oil and gas derivates

• Fertilizers

• Resins

Supply & Marketing

• Sales of refined products

• Retail

INTERNAL ANALYSIS

RESOURCE BASED VIEW

Tangible

•Infrastructure (off-shore platform, pipelines, equipment)

•Means of transport

•High end technology

•Distribution p.o.s

intangible

•Perforation agreements

•100 year of experience

•Global mindset

•CSR values

human

•Local employees

•Trading network

•Engineering expertise

•Public relation policy

Company know how

•Exploration; explotation

•R&D development

Org. routine

•Logistic process

•Local recruitment

RESOUCES

COMPETENCES

EXTERNAL ANALYSIS

KSF - UPSTREAM

KSF – DOWNSTREAM

KSF – CHEMICAL

ATTRACTIVENESS

Total is involving in project in order to develop biofuels in partnership with the leading companies in this sector

Expanded production of solar photovoltaic power

Investing in Renewable Energies

COMPETITION ANALYSIS: WEIGHT AND PERFORMANCE

Net results 2011

Revenues 2011

35 000

30 000

25 000

20 000

15 000

10 000

0

50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000

Exxon Mobil

Royal Dutch Shell

BP

Chevron

TOTAL

Conoco Philips Eni

THE EVALUATION OF THE ATTRACTIVENESS OF THE SEGMENTS

Global oil, gas & consumable fuels market

Year $ billion € billion % Growth

2007 433.1 311.3

2008 450.1 323.6 3.9%

2009 461.8 331.9 2.6%

2010 484.9 348.6 5.0%

2011 500.3 359.6 3.2%

CAGR: 2007–11 3.7%

Global renewable energy market value

Year $ billion € billion % Growth

2007 691.3 496.9

2008 733.9 527.6 6.2%

2009 683.7 491.4 -6.9%

2010 735.0 528.3 7.5%

2011 767.5 551.7 4.4%

CAGR: 2007–11 2.7%

Global specialty chemicals market value

Year $ billion € billion % Growth

2007 300.7 216.2

2008 361.9 260.2 20.3%

2009 256.5 184.4 -29.1%

2010 313.3 225.2 22.1%

2011 399.8 287.3 27.6%

CAGR: 2007–11 7.4%

Global oil & gas marketing and supply market value

Year $ billion € billion % Growth

2007 5,883.5 4,231.1

2008 6,431.2 4,625.0 9.3%

2009 6,967.1 5,010.5 -35,8%

2010 9,026.9 6,491.8 29.6%

2011 5,797.6 4,169.4 38,3%

CAGR: 2007–11 10%

INTERNAL ANALYSIS: MCKINSEY MATRIX

Low Medium High

Low

M

ediu

m

Hig

h

Business strength (competitive position)

Industr

y a

ttra

ctiveness

Chemicals

Marketing and

supply

Renewable energies

Oil and gas

NB: The size of the circles represents the market value

SWOT ANALYSIS

Helpful Harmful In

tern

al o

rig

inal

Exte

rn

al o

rig

inal

•A strong market presence coupled with integrated operations •Strong R&D capabilities •Leadership position in refining and marketing

•Oil spill in the Atlantic •Violation of anti-competitive laws

•Environmental regulations •Regulations concerning Iran •The US credit downgrade may impact the future oil prices, placing a downward pressure on Total’s sales

•Expanded production of solar photovoltaic Power •Strategic initiatives in the area of biofuels •Establishment of Jubail Refining and •Petrochemical Company

STRATEGY

STRATEGIC ANALYSIS OF THE TOTAL GROUP

Factors influencing strategy decisions

The fluctuation of gas and oil prices

The increasingly more difficult access to reserves

The scarcity of resources

The increasing of geopolitics risks and petrol nationalism

The change in global demand for petro products

And the environmental issues

Strategy in upstream

Investment policy in exploration and extraction activities

Geographic and technical diversification in the production of hydrocarbons

Integration into LNG

Objective of becoming the 2nd world producer

Huge investments in new projects to diversify supplying

STRATEGIC ANALYSIS OF THE TOTAL GROUP

Restructuring activities

Adaptation of activities of refining in Europe to oil demand

Development of markets in Asia and Middle-East

Reorganization of different poles in the Group

Enlarging the energetic value offer

Prepare the after-oil

Improve the group image

Development of biofuels, solar energies and nuclear energy

ACTIVITIES REORGANIZATION

Upstream Exploration and production of hydrocarbons

Downstream Refining and distribution

Chemicals Fabrication of petrochemical

products

Current organization of Total’s activities

Upstream Exploration and production of hydrocarbons

Downstream-industrial Refining and fabrication of petrochemical

products

Downstream-commercial

Distribution, marketing-

supply

New organization of Total’s activities

STRATEGY FOR THE LONG TERM

Development in the solar and biofuels sectors

Long term strategy because preparation of the change in demand for the next decades

Nuclear Alliance with EDF GDF Suez but Fukushima events put a threat on this project

Solar Acquisition of 50% in Tenesol, and 100% of Photovoltech, agreement with Sun power to develop solar panels

Biofuels Production of methanol and dimethyl ether

Eolian Central built in Mardyck in the Flandres

CORPORATE STRATEGY FOR UPSTREAM: VERTICAL INTEGRATION

Upstream

To answer the increasing demand in oil globally, Total wants to develop the activities of extraction and exploration of new reserves through vertical integration, which provides the company with a good supply chains control and improve efficiency

CORPORATE STRATEGY FOR UPSTREAM: VERTICAL INTEGRATION

Three main factors reinforce the interest for this integration:

The average annual price of the barrel reached in 2011 an historic price of 120 dollars and made profitable the exploitation of reserves that require complex technology;

The events in Libya and Iran encouraged Total to diversify and to integrate its supplying;

The exploitation margins have been reduced in refining (the capacity of refining is greater than demand in Europe).

In October 2010 Acquisition of 60% of Yam’s petroleum, an Ivoirian oil company, to get access to offshore reserves

In January 2011 Exploitation agreements in Argentina to exploit shale gas in Neuquen Lake

In March 2011 Acquisition of 33% in three agreements to exploit Albert Lake reserves

In December 2011 Agreement with Novatek to exploit a field in Russia by 2015 for 65,000 barrels a day

In January 2012 Acquisition of 25% of oil sands in Ohio, USA, by creating a joint-venture with Chesapeake and EnerVest

CORPORATE STRATEGY FOR DOWNSTREAM: VERTICAL INTEGRATION AND GEOGRAPHICAL DIVERSIFICATION

Downstream

Improve presence in Liquefied Natural Gas (LNG) and obtain greater market share

Presence in North America, Algeria, Angola, Nigeria, Australia, Pacific Asia

Development of liquefaction, regazification, maritime transport, stockage

CORPORATE STRATEGY IN DOWNSTREAM: LINKED DIVERSIFICATION

Due to low refining margins in Europe, Total decided to remove its activities progressively in this sector and implanted them into the new emerging markets of Asia and Middle-East.

Furthermore, in order to improve the profitability of downstream activities, Total announced in October 2011 the fusion of refining and petrochemicals activities. This operation will allow industrial synergies with economies of scope. They put in common the key resources and competencies of both the refining and petrochemicals activities in order to create synergies

February 2010 Closure of refinery in Dunkerque, France

January 2011 Modernization of the refinery in Normandie to readjust the production of diesel

February 2011 Selling of 48% of the Spanish CEPSA equity for $3 billion in order to reduce the refining capacities in Europe

October 2011 Announcement of the fusion between refining and petrochemicals activities + creation of a marketing-supply division, in order to create synergies

CORPORATE STRATEGY FOR CHEMICALS: VERTICAL INTEGRATION AND MARKETING DIVERSIFICATION

• Vertical integration: as for the other segments, Total wants to reduce its costs and get higher market share through a lot of acquisitions, and alliances, as illustrated in the chart below.

• Moreover, they intend to diversify their products within this particular segment by proposing a higher range of petrochemical products

SBU STRATEGY

Breaktrough strategy

Reference offer Low and differentation

High & differentiation

M&S

CHEMICALS OIL&GAS

GREEN ENERGY

VALUE

PRICE

+

-

- +

Oil & Gas

• The need for oil and natural gas is steadily rising throughout the world. Production tests are used to evaluate the feasibility and profitability of the project. Total’s forecasts are based on an expectation of strong production growth by 2015

Chemical

• We aim to unlock synergies to be more competitive, optimize the management of feedstock streams, capital expenditures and maintenance turnaround at certain production sites and pool support functions

Green

• TOTAL has developed expertise in the power generation sector, especially through cogeneration and combined cycle power plant projects. TOTAL has committed to developing innovative technologies to improve its portfolio, becoming more specialized and provide special product to the market

Marketing & Services

• Total is developing its activities in line with several objectives. We aim to maintain our commercial competitiveness, In every region of the world, the Marketing & Services organizes the sale of products to meet local requirements.

LIMITATION

IMPROVEMENT PURIFICATION

FOCALISATION

M&S

GREEN ENERGY

NICHE

WHOLE

LOW HAND

HIGH HAND

FOCUS ON DIFFERENTIATION

MULTIDIVISIONAL ORGANIZATION

ADVANTAGES

•Flexible (external influences and factors)

•Possibility to track the performance

• each branch is specialized in its own activities and competences.

DISADVANTAGES

•Duplication of central and divisional functions

•Likely to lose the central control

What do we do better: Sharing BCP (best case practice)

Long term training policy: Personal developement & skill developement

Doing more to reward all aspects of performance

MULTIDIVISIONAL ORGANIZATION

CORPORATE GOVERNANCE

Total has been actively examining corporate governance matters, with a:

Board of Directors

The Executive Committee

Management Committee

CULTURE

National

Functional division

Funds Pilot project could be funded, and with future management development

Organizational

•Attracting Talents

•Diversity

•Employee Relations

•Fair Compensation and Benefits

•Developing Skills

Organizational field

Take in care of Environment issue

The individual

Christophe de Margerie (CEO)

ETHICAL BUSINESS CONDUCT

The core principles underpinning Total’s Code of Conduct are:

Upholding human rights.

Preventing corruption and fraud.

Promoting free competition.

Promoting financial transparency.

Respect for people.

In all host countries where Total does business, Total educates and shares

with our employees our business principles and rules of individual behavior

— which are based on the values of respect, responsibility, integrity

and exemplary behavior — and requires employees to apply these

principles.

INITIATIVES AND PARTNERSHIPS

The United Nations created the Global Compact in 2000 following a call by its Secretary-General urging businesses to play an active role in the globalization process.

Partner companies must annually reaffirm their commitment and report their progress on one or more principles on the UN’s Global Compact web site through a Communication on Progress.

Total is involved even in: Extractive Industries Transparency Initiative (EITI) Voluntary Principles on Security and Human Rights (VPSHR) International Chamber of Commerce (ICC) International Petroleum Industry Environmental Conservation Association (IPIECA) Institute of Business Ethics (IBE) Global Business Initiative on Human Rights (GBI)

STOCKPRICE DEVELOPMENT

STOCKPRICE DEVELOPMENT

Compared to the market (CAC 40) Total’s stockprice shows a paralel development with only one critial price-fall in the last five years by the end of 2008 due to the financial crisis.

Total S.A. makes 12.55% of this market index, a fact which explains the similar development of the firms stockprice.

STAKEHOLDERS

Total S.A.

Employees

CEO

Owner

Shareholder

Suppliers

Society Governments

Creditors

Customers

Activist Groups

PRO SHAREHOLDER

Strong shareholder policy

Constant dividend growth

Constant investment in new projects inspite of their controversial nature

Construction of a pipeline in Mianmar condoning the use of civil sclavage inspite European’s Union’s sanctions

Acusations on corruption

Corruption in the Italian division of the company

Acusation of having done payments to Irqui officers during Sadam Husseins regime to secure oil supply

PRO STAKEHOLDER

Strong engagement in CSR initiatives:

Global Compact

GRI: Global Reporting Initiative

Due to local recruitment policy Total S.A. contributes in the countries of operation by creating jobs and enhancing economic growth

Strong commitment in R&D investment in new energies to gradually leave energy production based in fossil energies although this sector doesn’t bring hughe revenue yet (long term vision)

SOURCES

http://www.total.com/

Xerfi

MarketLine