10.55 Jean Jacques

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Paris, March 9, 2011

How to improve the long-term competitivenessof the European refining system

Jean-Jacques MOSCONISenior Vice President Strategy & Business Intelligence

TOTAL


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Oil demand driven by transport and growth in emerging countries

Increasing demand for light products: naphtha for petrochemicals, gasoline and diesel

for transport

Increasing need to upgrade refining units to meet the structure change of oil demand

2010-2030 evolutionof each segment

Transport +26%

Petrochemicals +40%

Power generation -35%

Industry and other -4%

Total +15%

10 30(e)

China

10 30(e)

Asia excl.China

10 30(e)

Middle East

10 30(e)

CIS

10 30(e)

Africa

10 30(e)

NorthAmerica

10 30(e)

SouthAmerica

10 30(e)

Europe

Oil products demand


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Oil products trade flows: unbalanced Europe

0.5NorthAmerica

AfricaAsia

Pacific

SouthAmerica

Europe

3

0.2

FSU

Total estimates

2009

Gasoline

Gas oil

0.2

0.2

0.7

Mb/d

MiddleEast

0.1

0.1

0.1

In 2009, Europe: 0.7 Mb/d of gasoline surplus and

0.85 Mb/d of gas oil deficit


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0

1

2

3

4

1990 1995 2000 2005 2010 2015 2020

4

Falling demand of gasoline in the Atlantic basin

Gasoline demandin EU

Ethanol

Mb/d

Gasoline

Gasoline demandin the USA

Gasoline

Ethanol *

Mb/d


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0

1

2

3

4

5

6

7

8

1990 1995 2000 2005 2010 2015 2020

Fuel efficiency measures limiting diesel demand for light duty vehicles

Potential impact of the new International Maritime Organization regulation forbunkers in 2015 leading to the substitution of heavy fuel oil by low sulfur gas oil

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Diesel/gas oil demand to stabilize in the medium term in Europe

Diesel/gas oil supply/demand in EUMb/d

Demand

Production

Biodiesel


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New competitors

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New international competitors: India

Reliance Jamnagar refineriesBiggest world refinery complex : 1,24 Mb/d :2 refineries 660 kbd (1999) and 580 kbd(2008)

Very complex and flexible (very large FCC,coker, light cycle oil hydrocracker)

Jamnagar,Gujarat

Essar Vadinar refinery

Commissionned in 2008

Current capacity 300 kbd expected to reach400 kbd by september 2012

Upgrading units will be added with theexpansion of capacity

Recent development of new refineries in Jamnagar2 new Indian private refiners Reliance and Essar

More than 1,5 Mb/d of new capacities (more than 35% of India capacity) in theGujarat state

Highly competitive refineries

Export oriented (export subsidies and no CO2 tax)


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There are 88 refineries with a total crude distillation capacity of 9.2 mbd by the end of 2010Chinese refinery capacity is forecast to reach over 12.5 mb/d by 2015

China refineries: not export-oriented but meeting domestic demand

Main Chinese refineries projects

Qinzhou, Petrochina,200kb/d, 2010

Tianjin, Sinopec150kb/d expansion, 2009

Tianjin Rosneft, Petrochina 51%,

Rosneft 49% 260kb/d, 2014

Caofeidian, Sinopec200kb/d, 2014

Chendu, Petrochina,200kb/d, 2014

Beihai, Sinopec ,

88kb/d, 2011 Zhanjiang Sinopec 50%, KPC50%, 300kb/d, 2015

Kunming, Petrochina,

200kb/d, 2015

Jieyang, Petrochina 51%, PdVSA49%, 400kb/d, 2016

Dushanzi, Petrochina,

200kb/d, 2009

Fujian, Sinopec and Fujian gvt 50%,ExxonMobil 25%, Saudi Aramco

25%, 160kb/d expansion, 2009Huizhou CNOOC,

240kb/d, 2009

Quanzhou, Sinochem, 240kb/d,

2013

Huludoa, Petrochina

200kb/d, 2014


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What evolutions are needed to improve

the European refining system ?

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The key features of a competitive European refinery

Capacity:

A minimum size to reach economy of scales

Complexity:

Ability to deliver high value light products

Flexibility of feedstocks:

Ability to process different slates of crudes thanks to an efficient trading

unit and an adapted logistics system

High distillate yield:

Adapted to the European market with a strong demand for diesel

Energy efficiency:

Integration of the different units with optimizing energy use

Integrated with petrochemicals:Combined optimization of the feedstock streams, sharing units andtransfers of products between refining and petrochemicals


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The competitive European refinery : capacity/complexity

Wide range of refineries in Europe, in terms of size and complexity

Only a third of them are over 200 kbd in terms of capacity

20% of them are very simple refineries (usually with a smaller size)

Range of distillation capacities ofEuropean refineries

Range of complexity ofEuropean refineries

Source: WoodMackenzie 2011 capacity and complexity index

kbd

Complexity index

0

2

4

6

8

10

12

14

0

50

100

150

200

250

300

350

400

450


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The competitive European refinery : diesel oriented

Ability to maximize diesel output

Development of distillate hydrocracking (22 existing units, around 15 unitsprojected over the next few years)

4.6 Mt

2.5Mt

2Mt

2.3Mt

1.8Mt3.5Mt

1.5Mt

1.6Mt

Likely projects of new distillate hydrocrackers as of 1/1/2011


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The competitive European refinery : integration with petrochemicalplants

Exchange of products between refineries and petrochemical plants

Refinery

PetrochemicalPlant

Main feedstocks :Naphtha

LPGPropylene

VGO, gas oil and fuel oil

Key products:Hydrogen

Low sulphur fuel oil

75% of the European steamcrackers are linked with a refinery


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European refining and new regulations

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Strong regulatory pressure on European refining

Regulations Product quality

Potentiel impact level

CO2 ETS

Biofuels

Regulations Industrial emission directive Fuel quality directive Water framework directive /

SECABunker0.1% S

InternationalBunker 0.5% S

Heating Oil50 ppm S

2010 2015 2020

JetSulphur specs

InternationalBunker

Al+Si < 30 ppm


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ETS Phase 3 for European refineries :the benchmark of CO2 emissions

Source : Concawe16

*: CWT Complexity Weighted Ton

Average10 percentile

Ranking of European refineries

Emissions of CO2/complexity

Emissionskg CO2/CWT*

With the benchmark system adopted for ETS, EU refineries will have to payas soon as 2013 on average for 20% of their CO2emissions

As an exposed sector, refining sector is entitled to free allocations based on the performance of the 1st decile of the plants Methology is based on 98 refineries which have emitted on average 140 Mt CO2/year on 2007-2008.

Comparison with the 1st decile drives to a deficit of around 20% for european refining

20% differencewith benchmark

Benchmark value:Allocation equal to

emission performance


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Impact of CO2 ETS system on European refining

2005 202020132008PHASE 1 PHASE 2 PHASE 3

CO2a

llowances(MTe)

~20 %

[Progressive application]

Reduction linked to thebenchmark system

Free allocations ~140 MT,without atypical units

Immediate application

What system will the European refining sector face for its CO2 emissions ?

At a price of CO2of 25/t, ETS system will cost European refineries

around 1 billion/year, including the effect of CO2 on electricity

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Source: Europia, Concawe

Cost of electricity self generated or bought by European refining: around 10% of CO2 emissions

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10.55 Jean Jacques