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PRESENTATION TO FOURTH IEA-IEF-OPEC SYMPOSIUM ON ENERGY OUTLOOKS Nathalie BRUNELLE Senior VP Strategy, Development, Research Refining & Chemicals January 22, 2014 Riyadh, Saudi Arabia
PRESENTATION TO FOURTH IEA-IEF-OPEC
SYMPOSIUM ON ENERGY OUTLOOKS
Nathalie BRUNELLE Senior VP Strategy, Development, Research
Refining & Chemicals
January 22, 2014
Riyadh, Saudi Arabia
US FEEDSTOCK ADVANTAGE : ALREADY A REALITY
2
US plants benefiting from low price of feedstock and energy
janv.-
07
juin
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-08
févr.
-09
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déc.-
09
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oct.
-10
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rs-1
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janv.-
12
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2007 2009 2013 2011
EU Naphta
US Ethane
Price evolution* $/t
Ethylene production Mt/y
18
22
26
30
34
2000 2004 2012 2008
Europe
North America
* Source : Total estimations
3
Evolution of US gas
production* (Bcfd)
Conventional Shale CBM
0
10
20
30
40
50
60
70
80
90
2005 2010 2015 2020
THE US ENERGY REVOLUTION & PETROCHEMISTRY
900
1 100
1 300
1 500
1 700
1 900
2 100
2010 2015 2020
kbd U.S. ethane balance
Ethane
demand
Ethane resources
Ethane supply
-4
-2
0
2
4
6
8
10
12
14
MORE NEW CAPACITIES TO COME IN ETHYLENE …
Asia Europe North America
Rest of world
2017 2011 2009 2013 2015
Additional demand 13-18
2009-18 change in global ethylene capacity
4
US to become a major exporter of ethylene derivatives
Mt/y
0
4
8
12
-4
Middle East
+3.2%/y
US projects on ethane to
add 30% regional capacity,
essentially dedicated to PE
derivatives
ME projects based on
mixed feedstock and allowing
more diversified downstream
Naphtha based production
represent now less than 50%
of world ethylene
… AND PROPYLENE …
5
-2
-1
0
1
2
3
4
5
6
7
Asia Europe North America
Rest of world
2017 2011 2009 2013 2015
2009-18 change in global propylene capacity
Mt/y
0
2
4
6
-2
Middle East
Around 23% to come
from alternative feedstock
(propane, coal, methanol)
in 2018 compared with
12% in 2012
US excess of propane to
be exported overseas
New routes for propylene production appear with attractive feedstock price
Additional demand 13-18
+4.3%/y
98
300
200
100
0
03 08 13 18
China Europe North America
Rest of Asia Middle East Rest of world
+3.1% +3.9% +3.9%
x% Compound annual growth rate
Global polymer demand
Mt/y*
… TO FEED GROWING GLOBAL MARKET
6
Will East of Suez growing demand continue to absorb additional capacity ?
* Perimeter : PE, PP, PS, PET, PVC *Perimeter: PE/PP/PS
Plastic consumption per capita*
Kg/cap/y
0
10
20
30
40
50
60
70
1980 1985 1990 1995 2000 2005 2010 2015
North America
Western Europe
Eastern Europe
China
World
India
NORTH AMERICA TO ARBITRATE ON PE EXPORTS
North
America
Africa
South
America
PE trade flows
(MT)
Middle East Asia
Europe
7
North American exports to target growing South American markets
but also Asia and Europe
WITH NO LOCAL COMPETITIVE FEEDSTOCK AND LIMITED MARKET
GROWTH, EUROPEAN PETCHEM INDUSTRY HAS TO ADAPT
End-2012 European ethylene capacity : 26 Mt/a
• Restoring utilization rates
• Increasing imports from US and Middle-East
Estimated 15% capacity reduction need over 2013-2020
8
70%
80%
90%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
European ethylene production capacity
Steamcracker operating rates
85%
75%
95%
Restructure
and develop
leading
integrated
platforms
Deliver
innovative
products
BENEFITING FROM THE ENVIRONMENT TO GET STRONGER
9
Manage a
sizeable
diversified
portfolio
Develop
sustainable
processes
and products
Our strategy : safe and reliable refining-petrochemicals
focused on increasing value and redeploying towards growing markets
TOTAL : MAJOR GLOBAL PLAYER IN PETROCHEMICALS
Petrochemicals players 2012 global capacity in Mt*
RoW
Middle-East Asia
North America Europe
world
9e and 2nd in Europe
10
20
30
40
50
2 % of global polyethylene capacity
11%for polystyrene
Europe
NAM
Asia
Middle-East
10
* Portfolio: Ethylene + Propylene + Benzene + Toluene + Mixed Xylenes + Polyethylene + Polypropylene + Polystyrene + EPS + PET + PVC
TOTAL’s global capacity at end-2013 (including share in Satorp)
Olefines
Aromatics (including PX) PE
PP
PS
Other
A sizeable and diversified petrochemicals portfolio
TAKING UP THE CHALLENGE ON KEY PLATFORMS
• Port Arthur cracker: maximizing ethane and
LPG cracking
• Benefiting from leading positions in
polypropylene and polystyrene
• Studying ethane side cracker project
Americas
• Developing 3 of the world’s best performing
platforms
• Green light for coal-to-olefin project in China
Middle East and Asia
• Priority to investments on integrated platforms
with feedstock diversification : Normandy,
Antwerp
• Reducing petrochemicals exposure :
Antwerp NC1, Carling
• Differentiate polymer products on higher
value markets
Europe
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Refining
Naphtha, LPG, refinery offgas,
propylene, aromatics, …
BENEFITING FROM INTEGRATION BETWEEN REFINING
AND PETROCHEMICALS BEYOND PRODUCT EXCHANGE
Petrochemicals
Hydrogen, steam,
low sulphur fuel oil, pyrolysis Gasoline
2013 2014 2015
100 M$
250 M$
2017
First synergies in
Normandy and Antwerp
Renegotiated energy
contracts
First benefits of rightsizing
central services
Synergies expected from TOTAL’s new R&C organization Net operating income
Unique optimized platforms
Leveraging on single site management,
common infrastructures and size effect
QUESTIONMARKS AND CHALLENGES FOR A MAJOR PLAYER
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•Demand growth in LAM and Asia
•Shale hydrocarbons phenomenon (magnitude, logistics, other regions ?)
•Gas exports from the US et potential impact on prices
•LPG associated production, “swing” demand and world trade flows
Markets
•Operational Excellence & Leading Innovation
•Access to competitive feedstock and energy
•Pace of restructuring
• Skills and know-how
Operations
People
