nergies!Sharing Oure

PERSPECTIVES 2011 / ANNUAL REPORT

Oil and gas are our core business. Exploring, discovering and bringing new fields on stream drive our growth.

Confronted with a demanding competitive environment, Total is adapting and evolving. An integrated business model, competitiveness and industrial excellence are our lead strengths.

Preparing the energy future means making clear choices now. Photovoltaic solar energy and biomass are the two resources were promoting.

Being in the right place at the right time is the name of the game. The Middle East and the Asia-Pacific region are experiencing economic booms. Now more than ever, were there on the spot.

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OPTIMIZE

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01 POINTERS02 WHO WE ARE03 OUR STRATEGIC VISION04 MESSAGE FROM THE

CHAIRMAN & CEO

We need profits in order to invest, stay financially healthy and deliver shareholder return. Its vital to move forward regardless of the business environment.Christophe de Margerie, Chairman & Chief Executive Officer

08 Oil and Gas Still Very Much in the Picture

09 Expanding Our Acreage10 Boldness Pays Off in Exploration12 A Conversation with Marc Blaizot,

Senior Vice President, Exploration

14 High Technology in the Deep Offshore

17 New Natural Gas Resources20 The Promise of

Unconventional Gas

22 Downstream and Chemicals Reorganize

24 Conversations with Patrick Pouyann, President of Refining & Chemicals, and Philippe Boisseau, President of Supply & Marketing

27 World-Class Industrial Facilities29 A Conversation with Bernadette

Spinoy, Senior Vice President, Refining & Petrochemicals Eastern Hemisphere

36 A Place in the Sun38 A Conversation with

Jean-Yves Daclin, Vice President, Photovoltaic Solar

39 Meeting the Challenges of Biotechnology

08Energy reinvents itself every day, constantly becoming more efficient, accessible, creative even astonishing.

INNOVATE

40 Energy for People Without42 Filling Up the Total Concept Car

with Inventions

44 Total access and Total Ecosolutions

40

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30

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Lets take a chance on new ideas!

An unexpected showcase of our know-how.

Total scales up in photovoltaic

solar energy.

Understanding the dynamics of emerging markets.

Whether you plan to scan our report quickly or read every word of it, our estimated times for a selection of articles will help you decide which ones to pick based on how many minutes you have to spare.

30 Jubail, a Refinery Deep in the Desert32 A New Wind Blows Across

the Middle East

33 Exciting Developments in Asia

45 OUR 2011 PERFORMANCE50 CORPORATE GOVERNANCE52 SHAREHOLDERS NOTEBOOK54 GLOSSARY

4

Two new businesses to enhance

competitiveness and agility.

CONTENTS

Total is more of a global energy operator

than ever. We continue to grow in our original

business oil and gas exploration and

production discovering giant fields and

bringing on stream projects such as Pazflor and

Usan. We are also becoming a major renewable

energy company, especially in solar and biomass.

Lastly, we are fine-tuning our integrated

business model to optimize the synergies among

our activities and become more agile at serving

our markets. All to achieve a single goal:

constantly improving our ability to meet

the worlds energy needs.

JUNE 15Spotlight on solar: Total becomes a global leader in the photovoltaic industry after acquiring a majority stake in SunPower.

AUGUST 26Production begins from the Pazflor field in Angola, an extraordinary offshore development.

SEPTEMBER 9Oil is discovered on French territory or, more accurately, offshore French Guiana.

OCTOBER 10Downstream and Chemicals' reorganization announced, to enhance their industrial competitiveness and marketing performance.

NOVEMBER 8Total celebrates 20 years in Russia, a strategic region in terms of natural gas resources. We are now a shareholder in Novatek.

BILLIONSales

184.7BILLIONGross capital expenditure

24.5BILLIONAdjusted net income

11.4INTEGRATED, INTERNATIONAL OIL COMPANY in the world

5th-th- RANKED LISTED,

EMPLOYEES worldwide

96,104Operations in more than

130 COUNTRIESUse your smartphone to read this QR code, found throughout the report, and go to the mini-site at http://annual-report.total.com

Words highlighted in gray are defined in the glossary.

2011, a year 2011, a year of changeof change

01POINTERS PERSPECTIVES 2011 ANNUAL REPORT

top-tier international oil company, Total is also a global gas and petrochemical operator. Today, in response to soaring energy demand, we are stepping up our expansion into solar and biomass. Going forward, we define ourselves as an energy company. Our mission is to enable as many people as possible to access energy. To do that we are counting first and foremost on oil and gas, which are far from being depleted. Our oil and gas activities

range from exploration and production to refining, shipping and trading.

Choices to Help Us DiversifyWe are also investing in renewable energies, opting to branch out into photovoltaic solar energy and biomass in particular. We have moved up our timeline for capital expenditure in those sectors, so that we can offer efficient, reliable solutions to partner fossil energies. Total is also a world-class chemical producer.

We make polymers as well as fertilizers, leveraging our integrated business model to do so. We also produce specialty chemicals, an activity that encompasses elastomer processing, adhesives and electroplating.

GROW INNOVATE DIVERSIFY DISCOVER PRODUCE EXCELLENCE SHARE OPTIMIZE MEET BOLDNESS SUCCESS CROSS-

LOOK AHEAD LISTENING GROW INNOVATE DIVERSIFY DISCOVER PRODUCE EXCELLENCE SHARE OPTIMIZE MEET BOLDNESS

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WE ARE AN ENERGY COMPANY

Based in more than 130 countries, our some 96,000 employees produce the energy and products the world needs while putting into practice the four cornerstone behaviors of the Total Attitude: Boldness. Mutual support. Listening. Cross-functionality.

02 WHO WE ARE

AmbitionAATo realize our ambition, we are leveraging our integrated business model, which enables us to capture all of the synergies in our business base. Together, our commitment to ethical practices, safety and corporate social responsibility form a shared foundation for our four strategic objectives: Drive profitable, sustainable growth in our exploration and production operations. Develop competitive, top-tier refining and petrochemical platforms. Respond to customer needs by delivering innovative solutions, particularly in terms of energy efficiency. Focus on two renewable energies, solar and biomass, to secure the energy future.

To responsibly enable as many people as possible to access energy in a world of constantly growing demand.

Our vision is to be an energy company, a leading international oil company and a global operator in gas, petrochemicals and, tomorrow, biomass and solar energy.

STRATEGIC

OUR

AAMissionAAOur VISION

TRATEGICTRATEGIC OUR

03 PERSPECTIVES 2011 ANNUAL REPORT - OUR STRATEGIC VISION

A Conversation with Christophe de Margerie, chairman & CEO

We need profits in order to invest, stay financially healthy and deliver shareholder return. Its vital to move forward regardless of the business environment.

MESSAGE FROM THE CHAIRMAN & CEO04

IN 2011, OUR INTEGRATED BUSINESS MODEL DEMONSTRATED ITS EFFECTIVENESS

PHILIPPE MANIRE is a consultant and essayist. He spent 20 years as a journalist, with publications such as the daily Le Quotidien de Paris, the business weekly Le Nouvel conomiste and the weekly news magazine Le Point, as well as on radio stations Europe 1 and BFM. He subsequently headed the Institut Montaigne think tank, which he left in 2008 to set up his own consulting firm, Footprint > consultants, to serve corporate executives and public decision-makers. He is also a columnist for weekly news magazine LExpress and has published several essays, including 2012s Le pays o la vie est plus dure [The Country Where Life is Harder].

Philippe Manire: Total experienced a serious event in March 2012 a gas leak on the Elgin wellhead platform in the North Sea. Doesnt it call into question the safety of your facilities?

Christophe de Margerie: The Elgin gas leak is a serious incident, but fortunately no one was hurt. The UK Depart-ment of Environment and Climate Change itself has said that the environmental impact is not significant, though any impact at all is always unacceptable. Id like to empha-size that the leak involves gas, not oil. We responded to the situation by applying two fundamental principles. One is personal safety, our top concern: the first deci-sion we made was to evacuate everyone from the plat-form. The second was transparency, both with respect to the UK authorities, the general public and of course our employees.After BPs accident in the Gulf of Mexico, we reviewed the integrity of all our sites, including the Elgin well-head platform. Unfortunately that wasnt enough, but we remain committed to safety. We must take steps to ensure that such incidents do not happen again. We must constantly strengthen the operational standards of our businesses, and not just in the Upstream; refining and road transportation, for example, are also, inevita-bly, high-risk activities. We know that. We made immense strides in 2011, sharply reducing the number of incidents. But its not enough we must do better, and then better still. Safety is more than ever Totals top priority, and we focus on it every day.

P. M.: 2011 saw another business and financial slump, which didnt stop Total from posting profits of more than 11 billion. You seem immune to the recession unlike many households.

C. de M.: Were a long way from the record earnings of 2008, but a big part of who we are is an integrated upstream-downstream company. As it happens, in the area were investing in most heavily the upstream we benefited from a favorable environment, with oil prices averaging $111 a barrel for the year. The down-stream situation is much more mixed, with refining as a whole posting a deficit, petrochemicals hit by the sharply deteriorating economy in the second half, and marketing and specialty chemicals holding their own quite well.Remember that we need profits in order to invest, stay financially healthy and deliver shareholder return. Thats why its vital to keep reshaping our company, to allow it to move forward and to maintain a satisfactory level of profitability and capital expenditure regardless of the business environment.

P. M.: How do you explain the startling disconnect between oil prices and the economy?

C. de M.: The fact is, oil is not an ordinary commodity: its price is not, or not any longer, the result of a simple tug of war between supply and demand. That is quite clear right now, with prices climbing despite the fact that theres enough oil to meet demand. So its not a problem of reserves. Speaking of which, Total had a nearly 200% reserve replacement rate, our best performance in a long time.The markets are actually factoring in geopolitical insta-bility that could jeopardize not just supply, but also the industrys ability to develop new reserves. Added to

Watch the video interview with Christophe de Margerie.

05PERSPECTIVES 2011 ANNUAL REPORT

that is the fact that oil is increasingly difficult to find and more and more expensive to develop.

P. M.: The periods other troubling phenomenon is the strong regional disparity in gas prices, which are high in Asia but historically low in North America. How do you explain that and what are you doing to adapt to it?

C. de M.: The Fukushima accident sent demand for gas soaring because gas, which is cleaner than coal and even oil, is the best substitute for nuclear power. Thats true all over the world, including in the United States, where most power plants have switched over to gas. Its even truer in Asia, where demand for energy is not letting up. However, at the same time significant gas finds were made in the United States. Since the U.S. market has very few export capabilities, prices there have plummeted, hence the geographic divide. Thanks to our strong positions and recognized LNG know-how, Total quickly adapted to the situation by shipping available cargoes to the areas of highest demand, thereby enjoy-ing better terms and conditions while helping to ease the pressure in the market.

P. M.: The United States new production consists mainly of shale gas. Its development has often seriously damaged the areas concerned, prompting France to ban it. How do we balance peoples legitimate concerns and the need to produce energy?

C. de M.: People have often generalized based on iso-lated examples. Admittedly, some questionable methods have been used in the past. They are not our methods. At any rate, I notice that the United States has created 600,000 direct jobs in the shale gas industry, with very positive impacts on growth. In France, where people complain endlessly about deindustrialization, we need to keep in mind that energy prices are a basic component of industrial competitiveness: you cant simultaneously demand lower prices and rely on imported gas and oil, whose prices are rising.Its our job to convince people that its possible to develop this resource in France too, but cleanly. Meanwhile, weve decided to join the quest in the countries that allow it, the United States, Poland and also China, where this type of unconventional gas is a major energy issue.

P. M.: Your goal was to position Total as a multi-energy company and today you are very active in photovoltaic solar energy. Regulations in that field, too, are moving in a less-than-favorable direction, with a decrease in feed-in tariffs. Are you still interested in this sector, which is languishing as a result of surplus capacity?

C. de M.: Subsidies have in fact been cut in France and several European countries. They were probably too high to begin with, but its dangerous to play a go-stop-go fiscal game that deprives businesses of the visibility they need to invest for the long term. Im convinced that solar has a place in the energy mix and that our invest-ment in SunPower, whose technology is remarkable, will pay off: todays surplus capacity will not last. That said, we would be fooling ourselves to think that renewable energies can replace fossil fuels overnight. We have to realize that, given the scale of demand, the world will need every available type of energy. By 2030, renewable energies will rise to 4% of final demand from 1%, which is already a big jump. A responsible company like Total cannot sit on the sidelines, for the planets sake and also if we want to better serve our customers. Here at Total, we made choices, which included develop-ing solar energy in which weve become a major player and biofuels. But fossil fuels as a share of global energy demand, though declining, will only fall from 80% to 76% over the next 20 years, in a market that is growing at a rate of 25% itself. So they will continue to play a crucial role. That tells you how important it is that we stay ambitious in our core business.

P. M.: Unlike some of your competitors, you wanted to continue downstream operations, but have reorganized them into two new businesses, Refining & Chemicals and Supply & Marketing.

C. de M.: Im a big believer in the idea that since were responsible for producing oil, we should also be respon-sible for selling it, profitably and efficiently. Before we reorganized we had an integrated refining and market-ing model, like most of the other majors.

06 MESSAGE FROM THE CHAIRMAN & CEO

By separating refining and marketing, we have created two aligned businesses, both of which we are counting on to generate profits and drive Totals growth. Were not turning our back on our integrated business model, but we are changing the way we integrate our activi-ties. There is a real rationale for that decision. Refining and petrochemicals are essentially the same fields. It makes sense to consolidate them to make them stronger. For its part, the new, independent Supply & Marketing business will find it easier to advance our goals with respect to retail distribution, a sector that still has sig-nificant untapped growth potential globally.

P. M.: In the summer of 2011 you predicted that gasoline prices would hit 2 a liter and you took a lot of heat for it. In the spring of 2012, they have. How does it feel to be proved right? How do you see drivers worries about fuel prices?

C. de M.: I did say that the 2 mark would be reached some day, but I was hoping it would be as far in the future as possible. The price of oil rose much faster than expected and has been passed on in prices at the pump, which have a retail margin this really cant be repeated often enough of just one euro cent per liter. Most of the price consists of taxes and, of course, the price of oil. So the best way to hold prices down is to produce more oil and more energy including non-petroleum-based fuels such as biomass and biofuels to ward off the risk of tight supply. So what I said about gasoline prices shouldnt create anxiety: its a realistic yet positive message, encouraging everyone involved to become aware of the issues and challenges.Total fully realizes the impact high gasoline prices have on end consumers and we are constantly working to find solutions. With the rollout of the Total access service station concept in France, we are phasing in more compet-itive solutions that will also help us regain market share.

Safety is more than ever Totals top priority, and we focus on it every day.

07PERSPECTIVES 2011 ANNUAL REPORT

Total had a highly productive year in 2011, discovering major fields, bringing innovative projects on stream and making headway in LNG. A bold plan of attack keeps our exploration and production activities growing.

ere more bullish than ever about the future of oil and gas. With global energy demand steadily rising, they have a vital role to play. In 2030, fossil fuels will still make up 76% of the energy mix and remain the most effective resources for meeting needs.We have set three goals to take our core business forward: to continually replace our reserves , either through new discoveries or partnerships with resource holders; to maximize our existing production; and to bring our building block projects on stream as quickly as possible.Of course, finding and producing oil and gas is grow-ing ever more complex and technically demanding. But our skills and expertise enable us to regularly push the envelope. In 2011, we made major strides and our reserves and production capacity climbed.

Higher Production ForecastsWe discovered major fields in Azerbaijan, Bolivia and French Guiana. We brought Angolas giant Pazflor field on stream and got ready to start up production from Nigerias Usan which we did in early 2012. These two deepwater finds required top-tier exper-tise and cutting-edge technology. We finalized major partnership agreements including with Novatek in Russia giving us access to new gas reserves. Lastly, we made further inroads in the fast-growing unconventional oil and gas sector, by developing projects or taking positions in Argentina, Australia, Canada, Poland and the United States.These accomplishments have allowed us to lift our production growth forecasts to an average of 2.5% a year between 2010 and 2015.

w

STILL VERY MUCH IN THE PICTURE

as,ENERGY MIXENERGY MIXAll the energy sources used to meet demand.

oil AND08 GROW

UGANDA FEBRUARY 2012Finalization of the agreement announced in March 2011 with Tullow and CNOOC. Total has a 33.33% working interest in the EA-1 (Total operator) and EA-2 licenses , in the Kanywataba license and in the Kingfisher production license. All are located in the Lake Albert region, where oil resources have already been discovered and which has significant exploration potential.

MAURITANIA JANUARY 2012Acquisition of a 90% interest in two licenses that we operate alongside national oil company SMH (10%): Block C9, spanning an area of more

than 10,000 square kilometers roughly 140 kilometers offshore western Mauritania, in water depths ranging from 2,500 to 3,000 meters.

Block Ta 29 in the Taoudeni Basin, 1,000 kilometers east of Nouakchott, deep in the Sahara desert.

INDONESIA 2011Several deals to acquire interests were signed across the country: A 50% interest in the 1,500-square-

kilometer Kutai Timur coalbed methane (CBM) block, in East Kalimantan province.

A 100% stake in the South West Birds Head exploration block , a 7,200-square-kilometer onshore and offshore block in West Papua.

The deep offshore Sageri (50%), South Sageri (45%) and Sadang (30%) blocks.

An interest in the South Mandar Block in the southern part of Makassar Strait.

ANGOLA DECEMBER 2011Three exploration licenses and three production sharing agreements signed with national oil company Sonangol. The blocks are located in the deep offshore Kwanza Basin, in still largely unexplored subsalt plays. Block 40: 7,604 square kilometers,

in water depths ranging from 1,500 to 3,400 meters. We are the operator with a 50% stake.

Block 25: 4,842 square kilometers, in water depths ranging from 700 to 2,200 meters. We are the operator with a 35% stake.

Block 39: 7,831 square kilometers, in water depths ranging from 1,330 to 3,400 meters. We are a partner in the block, with a 15% stake.

KENYA SEPTEMBER 2011Acquisition of a 40% interest in five licenses in the Lamu Basin in the Indian Ocean, offshore acreage spanning more than 30,500 square kilometers, with water depths ranging from 100 to 3,000 meters.

QATAR MAY 2011A partnership agreement with CNOOC Middle East Ltd. (operator) to acquire a 25% interest in the BC exploration license awarded by the Qatar government. The block, located 130 kilometers east of the Qatari coast, covers an area of 5,649 square kilometers, in water depths ranging from 15 to 35 meters.

Before we can explore plays and find oil and gas, we need access to acreage. The only way we can keep replacing our reserves is if we acquire interests in exploration licenses. Growing our exploration portfolio now is how we boost our chances of making valuable discoveries in the future. Opposite, a selection of the interests we acquired around the world in 2011 and early 2012.

EXPANDING OUR ACREAGE

December1, 2011A FIRST IN CANADAThe Canadian government has approved our Joslyn North Mine project to extract oil sands crude. The decision is an important milestone for Total as an operator in Canada. It also shows that the Canadian authorities are confident in our

ability to develop this unconventional resource safely and responsibly. Preliminary work began in 2012 to prepare construction of a mine expected to commence operations in 2018 and to produce 100,000 barrels of bitumen a day at plateau.

We have a 38.25% interest in the Joslyn North Mine, which will be developed in partnership with Suncor Energy.

09PERSPECTIVES 2011 ANNUAL REPORT

he elephants are back! Alongside their little brothers, big cats, these giant fields have been our chief quarry for three years. Totals aim is to add 700 million new barrels each year through exploration. To achieve it, we are ori-enting our strategy toward new and bolder types of exploration, using two simple approaches: trying out new ideas in already known plays and taking an interest in regions where oil and gas have never been discovered.

In 2011 our efforts paid off. In Azerbaijan, a giant gas field was found in the Absheron Block. A first well drilled in 2001 had come up dry. But innovative thinking and new information about the regions geology prompted us to start looking again in 2009 as an operator, and to explore farther north and deeper, up to 6,550 meters below the seabed in a water depth of 500 meters. Our exploration was right on target.

A Good HunchIn French Guiana we and our partners, have discov-ered a brand-new oil basin. Located in the Guyane Maritime license 170 kilometers northeast of Cayenne, the oil reservoir was discovered at a depth of more than 5,000 meters. It is thought to contain 0.5 to 1 billion barrels of oil. In deciding where to look, our explorers followed their gut instinct: they suspected that the regions geology might mirror the play in which the Jubilee field, discovered in 2007 off the coast of Ghana, formed on the other side of the Atlantic.We found our third elephant in Bolivia, by exploring the Aquio Block north of Ipati, where a find had already been made.

Hunches, bold moves and know-how spelled success as Total got back to making major finds in 2011. We discovered a slew of oil and gas fields, including three huge ones. They are our new elephants and big cats, as such mammoth reserves are called.

BOLDNESS PAYS OFF IN EXPLORATION

t

NEW FIELDS are discovered in deeply buried reservoirs, in increasingly complex geological environments.

METERSThe Absheron exploratory well in Azerbaijan encountered a 160-meter gas column that is estimated to contain several trillion cubic feet of gas and condensate.160

ELEPHANT ELEPHANT AND BIG CATAND BIG CATFields with reserves of over 500 million and 200 million barrels of oil equivalent respectively.

Senior managements greenlighting of resumed exploration of the Absheron field was a bold move on its part.

Bertrand Chevallier, Geosciences Manager, Total E&P Azerbaijan

10 GROW

FRENCH GUIANAThe hunt continues for new fields; the block to be explored stretches over roughly 24,100 square kilometers.

NORTHThe Norvarg well in Norway is Totals first Arctic find as an operator.

A LATITUDE OF MORE THAN 72

The Aquio and Ipati Blocks contain huge quantities of gas and condensate, with resources totaling close to a billion barrels of oil equivalent.Our survey of finds would not be complete without mentioning the big cat tracked down in Norway, the Norvarg field. Lurking at the bottom of the Barents Sea, it is thought to hold 10 to 50 billion cubic meters of very high-grade gas. Our new exploration drive is well and truly off to a great start!

Protecting the Environment in French GuianaPRESERVING FRENCH GUIANAS FRAGILE ECOSYSTEM IS ONE OF OUR MAJOR PREOCCUPATIONS. EVERYTHING NEEDED TO DO SO IS ALREADY IN PLACE. French Guianas coast is a rich and fragile ecosystem of rocky shores, beaches some of which provide leatherback turtles with a place to lay their eggs and mangroves teeming with fish and crustaceans. It is also a hub for fishing, an industry pivotal to the local economy. To protect it, risks and hazards were thought through before exploration of the remainder of the block began. Drilling operations, especially projected pressures, are prepared meticulously. Drilling parameters are controlled round the clock and blowout preventers are tested. And response measures are in place to capture, contain, recover and disperse spills. In November 2011, the French government also tasked an expert, Anne Duthilleul, with identifying the steps required for environmentally safe operation that would also deliver benefits for local communities. Her report is due out in June 2012, with production not expected to start before 2016 at the earliest.

Core samples taken during exploratory drilling are stored at our Technical and Scientific Center

in Pau, France, for examination.

Before our discovery offshore French Guiana, few people in the oil industry believed there was oil in the area.

Nigel Langridge, Geographical Manager of Exploration Coordination & Arbitration (CAE), Americas, Total Exploration

11PERSPECTIVES 2011 ANNUAL REPORT

GROW12

Our exploration has a new emphasis that can be summed up in two key words: boldness and tenacity.

What are the new directions of Totals exploration strategy?Getting back on the track of major discoveries and diversifying our acreage. Our goal is clear adding 700 million new barrels a year. To do that, we must focus our exploration on large-scale prospects and strike out into new plays and areas. The big game hunt is on! Were willing to risk fewer positive wells, as long as there are more barrels at the end of the day.

Practically speaking, how do you manage that?By stepping up the number of our licenses, enhancing seismic interpretation and drilling more wells. But most important, by regaining a taste for innovation and risk-taking. We have to take a chance on new ideas! Exploration is hunting, after all: we must be able to detect even the faintest scent, venture off the beaten path, investigate and crosscheck our leads. It boils down to a mindset that must be our top priority.

Which plays do you have the highest hopes for? Frontier basins where no discoveries have been made yet, such as abrupt margins, the sudden transition areas between the continen-tal shelf and the ocean, as in French Guiana. And carbonate reservoirs underneath thick salt layers, as in the Caspian Sea. We also need to explore around and below existing fields, like we did in the North Sea. And we plan to keep expanding in unconventional oil and gas, such as shale gas, shale oil and coalbed methane, also known as coal seam gas.

What resources do you have at your disposal?We are one of the oil majors that invests the most in exploration. In this ever more high-tech and costly field, our budget has been climbing steadily for three years, reaching $2.1 billion in 2011. More important though, our teams are highly motivated. They have a real pioneering spirit we must keep cultivating!

Lets Take a Chance on New Ideas!A Conversation withMarc Blaizot, Senior Vice President, Exploration

PERSPECTIVES 2011 ANNUAL REPORT 13

chieving first oil is a long, hard slog. Buried in increasingly hard to reach places, oil and gas reserves are anything but easy to develop. Producing fields hundreds of meters beneath the sea is a formi-dable technological challenge. Pazflor in 2011 and Usan in 2012 were decisive steps in our conquest of the deep.

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On the Pazflor project, Total leveraged the pooled competencies of an international, integrated team, with even more local participants than on previous projects.

PFIRST OIL FIRST OIL The first barrel of oil produced by a field when it is brought on stream.

eeep Off shorHIGH TECHNOLOGY IN THEPazflor and U

san, our two major deepw

ater projects, are coming

on stream

and pushing the envelo

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gamble to produce vast q

uantities of oil and gas in

the ultra-deep offshore

1,200 meters of water

in the case of Pazflor. Th

e projects, which allied

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several world firsts.d

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PazflorA World First with PazflorIn late August 2011, Pazflor, one of the biggest deep offshore oil projects ever undertaken, came on stream several weeks ahead of the initial schedule after 44 months of work. Located in the Gulf of Guinea offshore Angola, it will produce 220,000 barrels a day at plateau. The total capital expenditure for the project was $9 billion.In a world first on this scale, we pulled off the tech-nological feat of separating the gas and liquids

(water and oil) on the mudline, in 800 meters of water. The effluent comes from reservoirs more than 1,000 meters under the seabed and is gathered by an extensive network of subsea pipelines spanning an area of 600 square kilometers. The goal is to pump the heavy, viscous oil that makes up two-thirds of Pazflors reserves into these units and then bring it up to the giant FPSO the biggest built to date to be processed and stored.

Innovating Through Subsea SeparationIn addition to typical light oil, Pazflors reservoirs contain large quantities of heavy, viscous crude. The technological innovation engineered to extract it involves separating the gas and liquids on the seabed, in very deep water. This is done by three subsea separation units (SSUs) and six hybrid pumps purpose-designed for the Pazflor project. The SSUs are real behemoths, as tall as a seven-story building and weighing in at a thousand metric tons. Installed 800 meters below the surface, they are built to withstand erosion for 20 years, says Gilles Lematre, Subsea Production System Manager.

AT 325 METERS LONG and 62 meters wide, with a 32-meter-high hull, the Pazflor FPSO is the worlds biggest to date. It can store 1.9 million barrels and accommodate 240 people. The Usan FPSO is not far behind it: both are big enough to hold four soccer fields!

AT PAZFLORS OFFICIAL INAUGURATION on November 22, 2011, attended by Angolas Minister of Petroleum Jos Botelho de Vasconcelos, Sonangol Chief Executive Officer Gaspar Martins and Total E&P President Yves-Louis Darricarrre, Totals Chairman & CEO Christophe de Margerie hailed one of the worlds most outstanding oil projects ever.

FPSOFPSOFloating

production, storage and

offloading vessel.

Pazflor, the worlds biggest FPSO to date, able to process two very different grades of oil, one light and one heavy.

49 wells, 180 kilomet

ers of pipeline,

84 kilometers of umb

ilicals and 10,000 metr

ic tons

of equipment installed

across a 600-square-

kilometer area of seab

ed make the Pazflor su

bsea

network the most com

plex in the history of

deep

offshore development

s At peak, as many

as 4,500 people were w

orking on the project

worldwide.

Watch the Pazflor slideshow.

15 ANNUAL REPORTANNUAL REPORTPERSPECTIVES 2011

UsanWATER AND OIL SEPARATION AND DESALINATION inside the hull are other technological firsts, designed to limit the weight and bulk of the topsides.

Safety First and ForemostThe safety challenges on large-scale projects are daunting. This is especially true of the safety of personnel. Thousands of people from several countries are involved, representing dozens of different nationalities. On both Pazflor and Usan, they work in a complex environment, especially during offshore installation and hookup. To avoid accidents, Total deploys an organization grounded in stringent health and safety standards and makes sure that every contractor working on the projects also adopts it. All equipment was designed and built in accordance with the latest, toughest safety standards.

Usan Relies on Local ContentUsan, too, is a major-league player. Located a hun-dred kilometers offshore Nigeria in water depths of 750 to 850 meters, the field began production on February 24, 2012.2011 was spent on the final preparations towing the mammoth FPSO from South Korea, where it was built, then mooring it and hooking it up to flowlines and wells. At plateau, Usan will be able to process up to 180,000 barrels of oil per day.

The project took our Nigerian content policy to another level, with 30% of spend going to local businesses. That went for all the projects sectors and phases, from engineering and fabrication to assembly and offshore construction. And beginning in 2008, project management was also based in Nigeria, in a first that won plaudits from the government.Besides creating direct jobs, our local content policy helps consolidate the transfer of technical skills, benefiting the local oil industry as a whole.

40 wells, 65 kilomete

rs of pipeline,

70 kilometers of umb

ilicals and

8 production manifold

s set up around

an FPSO anchored in t

he deep waters off

Port Harcourt 14 milli

on hours worked

in Nigeria, an unprece

dented amount of

local content, on this

project.

16 GROW

GASNEW NATURAL

Gas will be the energy of the 21st century. Demand is forecast to grow 2.5% a year for the next

10 years, ranking it second in the global energy mix

in 2030. Already the worlds number two producer

of liquefied natural gas (LNG), we continue to expand our positions through a policy of

strategic partnerships. The impressive

projects that reached fruition in 2011

give a picture of the growth

under way.

RESOURCES

LIQUEFIED LIQUEFIED NATURAL GAS (LNG)NATURAL GAS (LNG)Gas that has been liquefied by cooling it to -163C.

17PERSPECTIVES 2011 ANNUAL REPORT

wo strategic projects, Ichthys LNG in Australia and Yamal LNG in Russia, will cement our leadership position in the liquefied natural gas market and enable us to respond flexibly to rising global demand. Europe, where demand is being driven by declining gas production in the North Sea, is one example. Another is Asia, a region that in 2010 took 60% of global LNG production, or more than 130 million metric tons. And finally and more generally, there are all the countries that lack both domestic production and land-based import infrastructure or that experi-ence spot needs. That means LNG is the only source of gas supply for Japan, South Korea and Taiwan. Although China and India are already strong drivers of global growth in LNG consumption, other coun-tries are gradually joining the LNG importers club, including Argentina, Brazil, Dubai, Indonesia, Kuwait and Thailand, to name just a few. With so much at

stake for our production tomorrow, we are securing the future with our LNG projects.

Australias Ichthys MegaprojectIchthys is a gas and condensate field located north-west of Australia in a water depth of 260 meters. Its reserves are estimated at 3 billion barrels of oil equiv-alent (boe) . Launched in partnership with Japans INPEX, Ichthys is the regions first large-scale LNG development. By end-2016, it will be producing 8.4 million metric tons of LNG annually. Its develop-ment is costing $34 billion and represents one of the largest capital expenditures ever made by Total. We will assist our operator partner by lending it our major project management know-how and our technical expertise.

Arctic Gas in RussiaRussias Yamal Peninsula is known for two things: its Arctic climate and just as striking its natural gas resources. The region is home to around 14 trillion cubic meters of gas. Thanks to a partnership agree-ment signed in March 2011 with Russian gas pro-ducer Novatek, Total is the first international oil company to operate there. Our goal is to develop the South Tambey field, with an estimated 1.25 trillion cubic meters of gas in place, and to build a liquefac-tion plant to export LNG. Christened Yamal LNG, the project will give us access to proved and probable reserves of some 800 million barrels of oil equivalent (boe) through our 20% equity interest. Plateau production will be 90,000 barrels of oil equivalent per day.

t

INPEX and Total, a Long-Term AffairWith the announcement of their decision to launch Ichthys in January 2012, INPEX and Total embarked on a partnership that will unite them for another 40 years. That also happens to be how long the pairs earlier partnership, on Indonesias Mahakam license, has lasted so far. The Kashagan project in Kazakhstan and the Joslyn development in Canada are two more examples of productive collaboration between the Japanese company and Total. Based on the volume of its reserves and its oil and gas production, INPEX is currently the biggest Japanese company in the exploration and production sector.

Australia, projected to be the worlds top producer of LNG in 2020, is now a flagship country for Total.

Jean-Marie Guillermou,Senior Vice President, Asia-Pacific, Total Exploration & Production

ICHTHYS LNG IN WHICH TOTAL HAS A 24% INTEREST IS THREE PROJECTS ROLLED INTO ONE: a semi-submersible central processing facility 200 kilometers offshore tied into an FPSO that will stabilize, store and export the condensate; an onshore plant in Darwin with a capacity of 8.4 million metric tons of LNG a year, where the gas will be liquefied; and an 889-kilometer pipeline linking the two.

BESIDES LNG, ICHTHYS LNG WILL PRODUCE 1.6 million metric tons of LPG a year and 100,000 barrels of condensate a day at plateau.

BARREL OF OIL BARREL OF OIL EQUIVALENT EQUIVALENT (BOE)(BOE)A standard reference unit that enables the energy content of gas and oil to be compared.

18 GROW

NOVATEK, A STRATEGIC PARTNERIn addition to our joint development of Yamal LNG, Total acquired a 13.09% equity stake in Novatek in March 2011, which was increased to 14.09% in December of the same year and is expected to reach 19.4% by 2014. This partnership gives us access to proved and probable reserves of around 1 billion barrels of oil equivalent.

Russias second-biggest natural gas producer after state-owned Gazprom, Novatek has posted record growth and enjoys strong development potential by virtue of a portfolio of resources comprising several giant fields. Russias leading independent producer, it supplies 13% of the domestic market and produced 1 million barrels of oil equivalent per day in 2011.

IN RUSSIA, TOTAL AND NOVATEK ARE PARTNERS IN THE TERMOKARSTOVOYE PROJECT, a gas and condensate field given the final investment nod at end-2011. Production is expected to start in 2015, with a capacity of some 65,000 barrels of oil equivalent per day.

Were scaling up. Ten years from now, Russia could account for 15% of our production.Jacques de Boissson, General Director, Total E&P Russie

20 Years in RussiaIn November 2011, Christophe de Margerie,

Totals Chairman & Chief Executive Officer,

and Yves-Louis Darricarrre, President,

Total Exploration & Production, made

the trip to celebrate Totals 20 years

in Russia. Our company was a pioneer,

being the first to venture into exploration

and production operations there, back in

1991. Today we have long-term commitments

in the country, in the form of trading,

marketing and petrochemical activities.

IN 2011, WE CONTINUED ENGINEERING WORK and related commercial negotiations with Gazprom to develop the giant Shtokman gas and condensate field in the Barents Sea.

YAMAL LNG WILL PRODUCE

15 TOTO16MILLION METRIC TONS of LNG annually, for total gas and liquids production of 450,000 barrels of oil equivalent per day.

Twenty-four percent Twenty-four percent of global gas of global gas reserves are found reserves are found in Russia. We have in Russia. We have to be there.to be there.Michael Borrell, Senior Vice President, Continental Europe and Central Asia, Total Exploration & Production

Yamal LNG project expedition.

19PERSPECTIVES 2011 ANNUAL REPORT

he world needs energy, and more and more of it. Every discovery counts in meeting growing global demand sustainably. In abundant supply worldwide, unconventional gas opens up new exploration and production prospects. Its potential is estimated at a staggering 380 trillion cubic meters, or about half of the worlds total gas resources, by the International Energy Agency (IEA). Most unconventional gas consists of shale gas.Huge amounts remain unproduced: at current con-sumption rates, known unconventional gas resources will suffice to meet global market needs for more than 50 years.

Having joined the quest several years ago, in 2011 we continued expanding our positions in unconventional gas, a field we know to be promising. Not only are we believers, we have gained proven skills and expertise through a policy of partnering with industry experts. We have everything we need to make the most of these remarkable resources and meet the primary challenge of producing them: the associated envi-ronmental impacts. Total is thoroughly proficient in and constantly innovating with respect to the tech-nologies used, such as hydraulic fracturing, especially throught R&D programs.

Unconventional gas is stealing the energy limelight and will be a crucial component of resource replacement in the future. We are honing our knowledge and skills and cementing our positions in this promising sector.

THE PROMISE OF UNCONVENTIONAL GAS

t UNITED STATES Already partners in the Barnett Shale, Total and Chesapeake entered into a new agreement in late 2011, when we acquired a 25% equity interest in the liquid-rich Utica Shale formation in eastern Ohio, held by Chesapeake and EnerVest. The joint ventures acreage covers an area of 2,500 square kilometers. The investment comes to $700 million. We are also financing our partners share of the costs of drilling new wells, for a maximum capital spend of $1.63 billion over seven years.

POLANDIn May 2011, Total (49%) signed an agreement with operator ExxonMobil (51%) to jointly explore for shale gas in the Chelm and Werbkowice concessions in the Lublin Basin. An initial well was drilled and a production test conducted in 2011.

UNCONVENTIONAL GAS UNCONVENTIONAL GAS An umbrella term for tight gas, coalbed methane (also known as coal seam gas) and shale gas.

LESSENING THE ENVIRONMENTAL FOOTPRINTHow do we make sure that shale gas is produced under optimal conditions? Our R&D teams are working on several issues at once. Our goals are to: Reduce water use and improve water treatment. We want to come as close as possible to a 100% recycling rate and are studying the feasibility of using brackish or even salt water for production to avoid competition with other freshwater uses.

Use fewer additives and change their composition; the ones we employ now are already highly diluted and can be found in everyday products. Limit visual and noise intrusions by reducing the number of surface wells. We are working on a solution that clusters several wells on a single surface pad and lessens their visual impact.

Aerial view of work on the port in Gladstone, Australia.

Total is partnered

with U.S.-based shale gas specialist

Chesapeake.

20 GROW

IN FRANCE, in response to the revocation of the exploration license we were awarded in 2010 in the Montlimar region, Total filed an appeal with the Paris Administrative Court on December 12, 2011. Our goal is to clarify the situation, especially since, in compliance with Frances Act of September 12, 2011, our work program excluded hydraulic fracturing.

IN ARGENTINA, in January 2011 we acquired interests in four exploration licenses in Neuqun province in the center of the country, alongside YPF. We operate two of them. The first wells have been drilled to assess their shale gas potential.

7.2 MILLION METRIC TONS PER YEARIN AUSTRALIA, THE ENORMOUS GLNG PROJECT has kicked off. Up to 5,000 people will work on the development, which involves extracting coal seam gas, also known as coalbed methane, from four fields in eastern Australia and building an LNG plant in Gladstone, Queensland, plus a 420-kilometer gas pipeline to connect them. The plant will have a capacity of 7.2 million metric tons a year. The project operator is Santos, alongside partners Total (27.5%), Kogas and Petronas. The total price tag is $16 billion, with start-up set for 2015.

Hydraulic fracturing is a long-established technique. The real issues raised by shale gas projects are those associated with any industrial operations: reducing local intrusions and managing water use and surface facilities. We have no doubt that shale gas can be produced responsibly, as long as everyone involved agrees on the resources to be deployed and the steps to be taken.

Bruno Courme,Vice President, Total Gas Shale Europe

Total has been present in Argentina since 1978 and operates 30% of the countrys gas production.

21PERSPECTIVES 2011 ANNUAL REPORT

In an economic and competitive environment shaped by sweeping change, we are giving new impetus to our chemical, refining and petroleum product marketing activities by refocusing them around two major areas of expertise, production and marketing. The revamp aims to heighten the visibility and performance of each.

DC

own-own-streamstream

hemicalshemicalsREORGANIZE

and

22 OPTIMIZE

he market is changing and Total must anticipate its trends, with one goal in mind: growing and creating value for all our stakeholders. Reorganizing our chem-ical, refining and petroleum product marketing activi-ties into two new businesses in the last few months clearly demonstrates our determination to move for-ward proactively. The reorganization has two aims. One is to build on existing synergies between refining and petrochemicals by combining them in a single major production hub, Refining & Chemicals. The other is to showcase our marketing strengths by giving Supply & Marketing more visibility.

Refining and Chemicals, Two of a KindRefining and petrochemicals are very similar in terms of operations and facilities. So combining them will eventually make our production base more efficient. This is especially important now, as European refin-ing struggles with shrinking demand that is spurring us to leverage every possible synergy to be more competitive. There are a number of ways we could improve, such as doing more to unlock the full value of our products and pooling energy procurement and our research and innovation efforts.Although other oil majors have taken steps in this direction, none has ever designed a strategy as unified as Totals, which actually merges refining and petrochemicals in a single organization.

Supply & Marketing Is the Flagship for Totals Commercial AmbitionsAt the same time, our creation of a business specifi-cally dedicated to the supply and marketing of petro-leum products is a response to the profound changes in our competitive environment. Our rivals used to resemble us; most were integrated companies. Today we are competing with more and more operators that focus exclusively on sales and

marketing. To stay in the game, our Supply & Market-ing business must be more agile.What we hope to achieve is competitive supply, more solid positions in mature market regions, strong expansion in fast-growing markets and a greater focus on innovation, especially new products and services for our customers. In short, our strategy remains the same, but we are lining up the resources we need to fully achieve our goals.

t

Why Two New Businesses?A safe, efficient Refining & Chemicals business expanding into fast-growing markets. Make safety and the prevention of major environmental risks an absolute priority. Adjust and optimize the production base in Europe and the United States by concentrating on large-scale facilities and maximizing synergies. Expand in Asia and the Middle East to tap into the growth of emerging markets and secure access to prime oil and gas resources. Set ourselves apart through technology.

Make Supply & Marketing activities more competitive. Solidify our positions in mature markets, especially Europe. Capitalize on our leadership in Africa. Grow our presence in Asia and the Middle East. Expand our specialty products worldwide. Provide reliable, cost-competitive supply to all our affiliates.

23PERSPECTIVES 2011 ANNUAL REPORT

What tangible benefits is Total trying to achieve through the new organization?P. P. : Working together will let us do more to unlock our activities synergies and thereby lower our break-even points. That creates sev-eral benefits, including more efficient manage-ment of our feedstock streams, pooling of our infrastructure and logistics services, optimized management of our maintenance turnarounds and overlapping capital expenditure.Its a tremendous opportunity to demonstrate the integrated business strategy we value so highly.

Total wants to develop world-class production facilities. What are your priority projects?P. P. : We want to allocate our capital spending so that our most efficient sites rival the best in class, which means focusing on our strategic, integrated facilities. Weve just done that in Port Arthur, are in the process of doing so in Gonfreville and are launching design studies for a large-scale project in Antwerp. In fast-growing markets, our key facil-ities are in Qatar (Ras Laffan and Messaied), Saudi Arabia (Jubail) and South Korea (Daesan).

You lead a business with many production sites. What safety issues are involved?P. P. : Making safety a priority is the cornerstone of our strategy. Its the first step toward achiev-ing operational excellence, and investment to promote safety will, of course, be a core concern at all our sites. Workplace safety, naturally, but also process safety. That is how we will keep the trust of our stakeholders in the long term.

Refi ning & Chemicals

OUR PRIORITY IS IMPROVING OUR COMPETITIVENESS TO DRIVE OUR GROWTH

What motivated Total to combine its refining and chemical activities into a single business?PATRICK POUYANN : Our goal is to make these very similar activities more competitive by maximiz-ing the synergies between them and to develop new positions. You could say that we are playing both defense and offense. Defense, because at this point we have to improve our economic performance in mature markets especially in Europe where our positions are strong but returns are low. Offense, insofar as we want to expand faster in growth markets in the Middle East and Asia by designing high-capacity produc-tion facilities aligned with our customers needs.

PATRICK POUYANNS CAREER A graduate of two French engineering schools, cole Polytechnique and cole des Mines in Paris, Patrick Pouyann joined Total in 1997 after holding positions in various ministries, on the Prime Ministers staff and as an advisor to the Minister of Telecommunications. He held several senior management positions in Exploration & Production, in Angola and Qatar, and then in Finance and Business Development, before being appointed Senior Vice President of Chemicals and Petrochemicals in 2011. On January 1, 2012, he was appointed President of the new Refining & Chemicals business and a member of Totals Executive Committee.

Patrick Pouyann, President, Refining & Chemicals and member of the Executive Committee

24 OPTIMIZE

The new organization boosts the visibility of Totals marketing activities. What prompted the decision?PHILIPPE BOISSEAU : We created the Supply & Marketing business mainly because we recog-nized that our marketing activities are different from the rest of our activities. We have a special responsibility to bring the Total brand to millions of customers. To do that, we have to manage our extensive network while providing top-quality service around the world. The unification and independence of our business let us focus more on our own specific issues and challenges going forward.

What are Totals strengths in the global marketplace today?P. B. : Without question, our ability to constantly reinvent ourselves. Weve been facing a radically different type of competitor in the last few years. Our traditional rivals have gradually concentrated their activities in just a few countries, while weve been determined to stay global. New types of competitors have emerged, such as national companies, traders and local independents. They all have one thing in common: an agility that has done a lot to drive their growth. Our new organization will help us challenge them and better showcase our strengths, namely recognized quality and service know-how and an ability to innovate.

What makes Total stand out?P. B. : The Total model technology and a local presence to better serve our customers is fairly unique. We must continue to offer innovative products and services, especially by supplying more than one type of energy. Speaking of which, we have opened the worlds first multi-energy service station in Germany. Today, Total has the credibility to advise our customers and offer them an array of solutions that combine conven-tional and new energies in an intelligent way. Its an opportunity to position ourselves as a benchmark operator.

Supply & Marketing

CAPITALIZE ON OUR TECHNICAL AND MARKETING EXPERTISE TO ACCELERATE OUR GROWTH

Philippe Boisseau, President, Supply

& Marketing and member of

the Executive Committee

PHILIPPE BOISSEAUS CAREERA graduate of two French engineering schools, cole Polytechnique and cole des Mines in Paris, Philippe Boisseau joined Total in 1995 after beginning his career in various French ministries and on the Minister of Defenses staff. He started out in Refining, then joined Exploration & Production as CEO of the Argentina affiliate and later President, Middle East. In 2007 he was appointed President of Gas & Power. On January 1, 2012, he was appointed President of the new Supply & Marketing business and a member of Totals Executive Committee.

25PERSPECTIVES 2011 ANNUAL REPORT

%74 OF TOTAL EMPLOYEES work in the new Refining & Chemicals and Supply & Marketing businesses.

TOTALS STRATEGIC REFOCUS IN THE UNITED KINGDOMAt end-2011, we sold off part of our marketing assets in the United Kingdom, in particular our service station network, to the Rontec Investments LLP consortium. We remain in the UK market through our lubricants, jet fuels and special fluids, as well as our Lindsey oil refinery and our chemical production activities.

Total Continues to Divest Non-Strategic AssetsIn August 2011, we sold our interest

in CEPSA, Spains second-largest

oil company, to the United Arab Emirates

IPIC for 3.7 billion. That further narrowed

our exposure in European refining, after

having already reduced our refining

capacity there by almost 25% since 2007.

However, we have not pulled out of Spain and

continue to grow our lubricant, specialty

product and chemical businesses in the

country.

RESHAPING SPECIALTY CHEMICALSWe continue to refocus our Specialty Chemicals business. A portion of our resins assets, comprising photocure and coating resins, was sold to Arkema. And hydrocarbon resins and composites, which are directly downstream from petrochemicals, have been moved to our petrochemicals business.

DOWNSTREAM AND CHEMICALS ACTIVITIESwere reorganized into two major businesses, Refining & Chemicals and Supply & Marketing, on January 1, 2012.

The new organization is being created without any downsizing or outplacement.

We are asserting our identity as a leading production and marketing company.

14 %Total aims to achieve ROACE of 14% for all Downstream activities in 2015.

26 OPTIMIZE

UPGRADES IN MATURE MARKETSWe strongly believe that refining can still be compet-itive in the West. As a result, we are revamping our production base to bring it in line with new consumer demands: less gasoline and more diesel, but also ever more environmentally friendly production. Faced with the scale of market change, the Normandy refinery moved quickly to implement the adjustments needed to keep it viable. With processing capacity unmatched by any other Total facility in France, the refinery has been recalibrating its production since 2006 in response to a sharp downturn in its exports, especially to the United States. The linchpin of its efforts is the ambitious RN 2012 project, which aims to transform the refinery into one of the most competitive in Europe. The project has three goals: to produce an additional 500,000 metric tons of ultra low sulfur (less than 10 ppm) diesel annually, to slash gasoline surpluses 60% and to lower carbon

emissions 30%. Total is spending 740 million to build and upgrade the installations concerned, modifying the refinery configuration by expanding a diesel pro-duction unit, revamping an atmospheric distillation unit to make it more energy efficient, and building a new diesel desulfurization unit scheduled to start operating in 2013.

We continue to upgrade our production base to tailor it to the markets new needs. What we do varies by region. In mature markets, we are making our refining and petrochemical facilities more competitive. In emerging economies, we are responding to growing consumption by building high-capacity industrial complexes.

WORLD-CLASS INDUSTRIAL FACILITIES

-30%THE CARBON EMISSIONS REDUCTION TARGET FOR THE NORMANDY REFINERY. The Packinox heat exchanger installed in 2011 illustrates the ambitious environmental policy we have implemented there. The single 150-metric-ton heat exchanger, ultra-efficient at minimizing air emissions, replaces 16 old heat exchangers for cooling and heating fluids, two vital steps in the refining process.

Were going to make Normandy a benchmark facility in Europe.

ric Dufour,RN 2012 Project Manager at the Normandy refinery

27PERSPECTIVES 2011 ANNUAL REPORT

Deep Conversion in the United StatesCombustion that meets the strictest environmental standards is another reason for the sweeping upgrade of our Port Arthur refinery, completed in 2011. Located in Texas near the Gulf of Mexicos oil and gas fields, the refinery has a brand-new coker a deep conversion complex that enables it to more efficiently process heavy oil and boosts its capacity to produce light fuel. It also features a new sulfur recovery unit that will produce an annual 3 million tons of ultra low sulfur diesel, the object of rising demand in the United States and around the world.

DEEP CONVERSION DEEP CONVERSION OR COKINGOR COKINGA process that cracks large oil and gas molecules and removes some of their carbon atoms in order to obtain lighter compounds such as LPG, naphtha and diesel.

Now well be able to process the heavy oil sourced by our logistics team, whether it comes from Latin America, Canada or anywhere else!

Graeme Burnett, Senior Vice President, Refining & Petrochemicals, Americas

The Port Arthur, Texas refinery

in the United States.

Expanding Our Petrochemical Positions in AntwerpWe have acquired ExxonMobils interest in Belgiums Fina Antwerp Olefins petrochemical plant, making us its sole shareholder. It is the second-largest plant in Europe producing base chemicals such as ethylene , propylene and benzene.

Our facilities were already using some of its production to make polymers. The acquisition lifts both the competitiveness of our petrochemical activities and the synergies with our Antwerp refinery.

28 OPTIMIZE

Were seeing more and more projects in emerging economies. What are your aims?Naturally our goal is to cement our mar-keting positions in a region of sharply rising demand. Especially in China, where refining capacity needs are taking off and are projected to reach 12.5 million barrels a day in 2015, compared to

9.2 million in 2011. Much of the region still imports petro-

chemicals when demand for polymers is rising twice as fast

there as in the rest of the world. Our capital expenditure in this

region reflects our commitment to remaining a major supplier of value-

added products, by concentrating on the most efficient integrated facilities,

such as the Daesan petrochemical complex in South Korea.

Petrochemicals and refining are growing. Are you adapting quickly?Strong Asian demand is also driving up the Middle Eastern market. Refining capacity in that region should jump 50% in the next few years. The regions petro-chemical capacity has already doubled in five years and now accounts for close to 20% of global capacity. Thats why Total has already invested heavily there to expand our production facilities. The SATORP project in Jubail, Saudi Arabia and QAPCO in Qatar, where a third low-density polyethylene line will start up in 2012, are two examples.

By creating competitive refining and petrochemical facilities, we cement our global leadership and meet our customers needs through energy-efficient solutions.

A Conversation withBernadette Spinoy, Senior Vice President, Refining & Petrochemicals Eastern Hemisphere

AN UPSWINGIN EMERGING MARKET CAPACITY

THIRD LINEIn Qatar, we continue to expand the QAPCO petrochemical plant, having started a third line to produce low-density polyethylene , a plastic used mainly for packaging film. The project is part of our strategy to diversify our feedstock to bring it in line with the markets current structure.

$1.8 BILLIONTo meet robust Asian demand, in 2011 we expanded capacity at our Daesan units in South Korea, bringing the production of ethylene to 1 million metric tons and of polyolefins to 1.15 million metric tons a year. We are also starting construction on two new plants at the complex, at a cost to Total Samsung Petrochemicals of $1.8 billion between now and 2015. The new units will double the sites capacity and make it possible to produce intermediate aromatics for the polyester chain, specialty polyolefins and jet fuel and diesel, which are refined products, while strengthening our position as a leader in energy efficiency.

29PERSPECTIVES 2011 ANNUAL REPORT

For the last three years, we have been building our biggest refinery twinned with a world-class petrochemical complex in Jubail, Saudi Arabia, in partnership with Saudi Aramco. The facility, one of the worlds most efficient, will process the heaviest grades of local crude oil and meet growing demand for petrochemicals. Construction kicked into higher gear in 2011. Join us on a tour of this leviathan rising out of the desert sands.

JUBAIL,A REFINERY DEEP IN THE DESERT

The refinery the most complex in Saudi Arabia will be able to process the heaviest local crudes into refined products that meet the strictest environmental standards, such as ultra low sulfur fuels, diesel and jet fuel. With an assist from these cutting-edge installations, the country home to a quarter of the worlds oil reserves will boost its refining potential and its production of petrochemicals.

In a highlight of the year, the hydrocracker reactors and coke drums are delivered to the site in January.

The project will create local jobs, with

1,100 PEOPLE eventually employed at the complex.

OUR PARTNERSHIP WITH SAUDI ARAMCOOverall capital spending on the Jubail project, the offspring of the SATORP joint venture between Total (37.5%) and Saudi Aramco (62.5%), exceeds $10 billion. As on all our projects around the world, we are offering our partner Saudi Aramco our experience managing very large international projects and our industrial and technological know-how. We are working together to prepare facility start-up and have created a training center for 400 young Saudi apprentice operators, who will eventually run Jubail. The curriculum includes classroom instruction, an internship at Saudi Aramco and hands-on training onsite. Some 130 of the apprentices, who were recruited in 2009, began working in the first units in February 2012.

ACTIVITY PEAKS ON THE WORKSITEJubails construction has entered its final leg: at end-2011, right on schedule, the project was nearly 80% complete and 117 million hours had already been worked. At years end, the building project spanning five square kilometers reached a peak in activity. The first units are scheduled to start operating in the first half of 2013, with the entire facility on stream by end-2013.

30 EXPAND

The construction site grew with impres-sive speed. The installations sprang up from the desert sands in just one year.

The construction site is a hive of activity: 43,000 people of 30 different nationalities worked there at peak in early 2012. 400 buses shuttle workers back and forth, morning and night. With tens of thousands of people going about their business, the site bustles like a regular city. You had better be organized and stay alert for traffic jams!

THE JUBAIL COMPLEXA REFINERY WITH A TOTAL CAPACITY OF 400,000 barrels per day, or 20 million metric tons a year.

CUTTING-EDGE INSTALLATIONS TO PROCESS HEAVY OIL:2 distillate hydrocrackers (MHC and DHC) 1 catalytic cracking unit 1 coker

A TOP-FLIGHT PETROCHEMICAL FACILITY, FEATURING:1 benzene extraction unit (150,000 metric tons a year)1 paraxylene production unit (700,000 metric tons a year)

43,000PEOPLE on the site at peak, logging 8.5 million hours of work per month.

It isnt just the size of the site and its hustle and bustle that make Jubail different. Its also the first time that Total has built a fully integrated complex, complete with refinery and petrochemical facilities, in a single stage.

Daniel Grunemwald,Project Director

e e ake akeake st kkst

PEOP8.5 m

,

31PERSPECTIVES 2011 ANNUAL REPORT

oon one in every two people will be under the age of 25: Middle Eastern countries, like those of North Africa, can count on their youth. Their popula-tion boom also heralds an economic one. Forecasts of 5% GDP growth through 2014 hint at fantastic opportunities to expand. The demand exists and we are ready to meet it, even in such troubled times as 2011.Very active in petrochemicals especially in Qatar, where we have an equity interest in the Ras Laffan ethane cracker for example we also have a strong foothold in the regional market for petroleum products.We are now solidifying our retail activities, both by adding more service stations and expanding in specialties such as lubricants and aviation products. In Jordan, we have opened new Rapid Oil Changes, modern auto centers that carry Totals entire range of lubricants and are very popular with local custom-ers. In Lebanon, where our affiliate turned 60 in 2011, we are still on the cutting edge of innovation. We have started marketing Total Effimax, a line of more energy-efficient, lower environmental impact fuels, in 180 service stations there. And in the United Arab Emirates we recently started supplying

ETHANE ETHANE CRACKERCRACKERA unit that converts molecules of ethane, a combustible gas found in natural gas and casinghead gas, into ethylene.

SHAMS, MIRROR, MIRROR ON THE WALLConstruction continues on the Shams concentrated solar power plant in Abu Dhabi in the United Arab Emirates. With earthworks complete, the alternator, turbines and 250,000 mirrors had all been installed by end-2011 and testing began in early 2012. Dotting an area of 250 hectares, the mirrors will heat a transfer fluid that will be used to produce steam and power. Shams will enable the UAE to supply more than 30,000 people with power. Start-up is scheduled for fall 2012.

Total was born in the Middle East, almost 90 years ago, as an explorer and producer. Nurtured by our historical roots, our presence today is multi-faceted. Rising demand in the booming Middle East region has spurred the growth of all our activities, including lubricants, service stations, refining, petrochemicals and solar.

A NEW WIND BLOWS ACROSS THE MIDDLE EAST

s the new Dubai airport, Jebel Ali, which is poised to become the worlds biggest very soon. All these new positions serve to strengthen the ones we already enjoy in Turkey, Egypt and elsewhere.

5 MILLION CUBIC METERS OF SAND MOVED 2,000 PEOPLE WORKING

ON THE CONSTRUCTION SITE

100 MW PLANT RATING

CUSTOM-DESIGNED FOR PRODUCING COUNTRIESTotal Integrated Energies Solutions, or TIES, has been tasked since September 2011 with providing energy consulting services to officials in producing countries. The Middle East, where high energy use especially of electricity is shaping up as a real challenge for governments, is the first region targeted for growth by TIES. The goal is to work with host governments to develop an optimal 10- to 15-year energy mix, looking at all of a countrys resources, including solar energy. To learn more, go to www.ties.total.com

Total is teeming with capabilities and knowledge found across different units. We aim to showcase them to offer host country decision-makers a long-term assessment.Jean-Franois Arrighi, Senior Vice President, TIES

32 EXPAND

Developments in AsiaExciting

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ICH SUPPORT TH

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OF THIS FASCINATING REGION OF THE WORLD.

All our activities oil and gas production, specialty product sales and retail networks

have been expanding at a fast clip in Asia in recent years. This is especially true

in China, where demand, driven by the countrys economic boom, just keeps soaring.

2011 was especially dynamic, mirroring our petrochemicals business, which is putting

down deeper roots in this mesmerizing region.

33PERSPECTIVES 2011 ANNUAL REPORT

t took less than a year, just one short year, to complete the upgrade of our polystyrene plant in Foshan, China. The project has doubled production capacity, to 200,000 metric tons a year. Designed by European teams, it was carried out by Chinese teams using local methods and suppliers.This model upgrade also embodies our goal of being a leading polystyrene supplier in Asia. Especially in the Chinese market, the preeminent market, critical both because of its size and its dynamic growth. China already represents 30% of the global poly-styrene market and that is projected to grow 5% a year over the next several years. Everything is poised to drive up its demand for plastic, including sharply higher GDP, Chinas position as the leading global exporter, earning it the title of the worlds factory, and an immense, increasingly affluent population.

China will account for one-third of global demand by 2030.Total is gradually making inroads in the Middle Kingdom through a strategy of products that offer standout performance. To that end, we showcase our exper-tise in cutting-edge, eco-friendly technologies, a strength in a major carbon-emitting country and a real edge in exporting.

The Leader in Global DemandChina has a voracious appetite for everything, not just plastics. The country supplanted the United States as the worlds top energy consumer in 2010; its car sales are going through the roof. All of our activities are being carried along on this unstoppable wave of expansion. Nearly all of our products have found a market in China. We refine oil there, develop lubricants, produce specialty chemicals, market fuels and are partnering the development of a gas field.This string of successes would not be possible without extensive mutual knowledge on both sides. To further improve our working relationship, we introduced the Leadership Development Program, whose goal is to train our future Chinese senior executives. Some 20 employees enrolled in the first class, which ended in October 2011 after 18 months of coursework. It is an effective way to cement our presence in China, for years to come.

CHINA, A STRATEGIC MARKET 1.34 BILLION PEOPLE

8 TO 10% ANNUAL GROWTH

LUBRICANTS GET THREE NEW PLANTSTotal started building a new lubricant and grease blending plant in Tianjin, eastern China, in spring 2011. It will be the third of its kind in the country, after plants in Guangzhou and Zhenjiang, and one of the biggest in the Asia-Pacific region. The plant will have a capacity of 200,000 metric tons and cost 30 million. Commissioning is scheduled for 2013.

CTO IN INNER MONGOLIA: A MAJOR STEP FORWARDThe foundation stone for the coal-to-olefins (CTO) project site has been laid in Ordos in Inner Mongolia. It is a major step forward in the official approval process for the joint Total-China Power Investment Corporation (CPI) project to build a world-class industrial complex producing plastic from coal an integrated technology the Chinese want to promote. The site will have an annual capacity of 800,000 metric tons of plastic.

i

Safety Champ Foshan The Foshan plant is a model of safety, with engaged employees who strictly comply with procedures. The site has won several safety awards since it was acquired in 2003, both from the Chemicals business Foshan is a three-time winner of Chemicals Safety Excellence Award and at the corporate level. Its most recent honor was the Group Safety Award, presented to Foshan in early 2011 for its involvement in launching Totals Golden Rules for workplace safety. The 12 rules apply to all of our sites and cover everything from managing high-risk situations and confined spaces to traffic and lifting operations.

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34 EXPAND

Sulige South, a Strategic License

1. HUTCHINSON ACQUIRES KEUMAH IN SOUTH KOREAIn June, our elastomer processing affiliate Hutchinson acquired Keumah, one of South Koreas principal suppliers of automotive fluid transfer solutions, including hoses for fuel, air conditioning and other systems.

2. A NEW PLANT FOR BOSTIK IN VIETNAMOn October 4, 2011, our adhesives affiliate Bostik inaugurated a new plant in Vietnam. Located in Binh Duong province, it produces a wide range of adhesives, sealants and coatings used in packaging, paper converting, the shoe industry, construction and many other fields.

3. A GIANT GAS SALES AND PURCHASE AGREEMENT WITH KOGASStarting in 2014, we will deliver 33 million metric tons of LNG over 18 years to South Koreas Kogas. The huge, very flexible contract calls for adjusting deliveries to reflect opportunities and changing needs in the South Korean market. Its flexibility, together with our diverse supply sources, is what clinched the deal for Kogas.

4. A TECHCENTER DEDICATED TO SPECIALTY PRODUCTS FOR THE ASIA-PACIFIC REGIONIn March 2012, we opened our first techcenter dedicated to specialty products. Based in India, it is responsible for customizing our products lubricants, special fluids, asphalt, additives and special fuels, among others to the specific demands of the Asia-Pacific region, in cooperation with our Solaize research center in France.

5. FURTHER EXPANSION AT DAESANThe Daesan integrated petrochemical complex in South Korea, which already counts 13 plants and nearly a thousand people, will welcome two new units between now and 2015. A new $1.8 billion capital expenditure will help the South Korean facility expand its commercial positions in China, while leveraging synergies between refining and petrochemical activities and a more diversified supply base (see page 29).

700ththSERVICE STATION IN THE ASIA-PACIFIC REGION in late 2011, in Jakarta, Indonesia. We aim to have 1,000 stations in this promising region by 2014.

WE OPENED OUR

The Sulige South license secured in 2006 marks Exploration & Productions return in force to China. Partnering with operator PetroChina, an affiliate of national oil company CNPC, we are going to develop and produce a tight gas reservoir in the southern end of a nearly 40,000-square-kilometer gas field, one of the biggest ever discovered in China. Drilling of the first wells began in 2011.

It is an invaluable partnership. First, because it enables us to access new gas resources. Second, because it offers us a chance to cement our cooperation with CNPC by providing it with our technical expertise in tight gas and large-scale project management. Lastly, Sulige South could open doors to other projects in this major oil and gas country, as well as internationally, in ventures with leading Chinese companies.

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35PERSPECTIVES 2011 ANNUAL REPORT

A PLACE IN THE

While the world wonders

about its energy future,

we are actively preparing for it

by diversifying our investments

in sectors that can supplement

oil and gas. In 2011 we sped up

our growth in the solar sector,

positioning ourselves as

a global industry leader.

36 DIVERSIFY

iven rising energy demand and the growing scarcity of resources, solar now seems destined to be an essential ingredient in the global energy mix. Total foresaw this long ago and jumped into the photovoltaic industry in the 1980s, with Tenesol. In mid-2011 we moved up a decisive notch, when we acquired a majority interest in California-based SunPower, a global leader in solar energy. The $1.4 billion capital outlay radically scales up our strategy, with the ultimate goal of creating a new global solar energy leader.SunPower is known for its excellence in technological innovation. Its photovoltaic modules offer outstand-ing energy efficiency, averaging 22.4% compared to 16 to 17% for its competitors, especially Chinese suppliers. Commercially, SunPower is active across the photovoltaic solar value chain, from cell produc-tion to the turnkey design of large plants, and boasts a solid distribution network in the United States, predicted to become the worlds leading market a few years from now. All these qualities are assets, positioning us to accelerate our growth.

Rapid GrowthBuoyed by our equity acquisition, SunPower will be able to continue growing at a brisk pace. That is crucial to keep up with the markets medium- and long-term transition to grid parity, or solar power prices equiva-lent to conventional power prices, a situation that already exists in markets such as California.

To cement its new global dimension, in early 2012 SunPower also absorbed France's Tenesol, which is now its wholly owned affiliate. This gives it an addi-tional springboard for growth in French, European and African markets.Other marketing synergies will emerge later, in par-ticular in Gulf countries, where Total is already well established.

gSUNPOWER, A PIONEERING, CREATIVE COMPANYSunPower has been developing high-efficiency photovoltaic technologies for more than 25 years. A Silicon Valley pioneer, it has gradually carved out a niche for itself as one of the worlds leading solar energy specialists, in large part because of the reliability of its solutions.After first acquiring a 60% interest, later raised to 66%, Total has left SunPowers management team in place, a strategy that aims to preserve the creativity and start-up culture that have made SunPower so successful.

5,000PEOPLE in 16 countries, and posted revenue of $2.5 billion in 2011.

SunPower currently has a workforce of

SunPowers photovoltaic cells have an average

energy efficiency of 22.4%, versus 16

to 17% for its competitors.

Watch the SunPower animated video.

37PERSPECTIVES 2011 ANNUAL REPORT

How is the solar market doing today?The solar market is mired in a sudden crunch of unprecedented scale. Mature economies, which rolled out policies to support the sec-tor, are now being pressured to cut public spending. In some cases, such as France and Italy in 2011, the rug was pulled out abruptly.At the same time suppliers, mainly from China, did not foresee the slowdown in the markets growth down in volume terms from 110% in 2010 to 40% in 2011 and invested heav-ily in new production facilities. The result was huge surplus capacity, causing a sud-den collapse in prices, which slumped 40% for modules in 2011. We therefore have a critical period to weather, probably lasting a year or two, during which growth will be weak and the industry will consolidate. After that we anticipate growth will resume, at a steady rate of about 20% a year.

Does that compromise Totals stated objectives for the solar sector?Absolutely not. The solar market remains attractive to long-term investors. According to the latest European Union report on the photovoltaic industry, solar power produc-tion soared 500-fold in the last decade and investments are expected to double again between now and 2015. We therefore have every reason to believe that solar energy is still a resource with a bright future ahead of it.

What are the growth prospects for Tenesol and SunPower?For 2012, the volume sales outlook for Tenesol is stable in France. Most of its growth will be international. SunPowers main growth engine will be North America, where the volume target is an increase of 30%, buoyed by the greenlighting of major projects for ground-based plants. With Totals support, SunPower is extremely well equipped to weather the storm and then establish itself as the leader in the sector.

A Conversation withJean-Yves Daclin,Vice President, Photovoltaic Solar

SOLARHAS A BRIGHT FUTURE

A NEW SOLAR PANEL PLANT IN FRANCETotal is finishing up the construction of a photovoltaic panel plant at the Composite Park site in Porcelette, eastern France. A Tenesol facility, it will produce panels featuring SunPower technology from 2012.

SUNPOWER, OFFICIAL SUPPLIER OF SOLAR IMPULSEFollowing the success of the Solar Impulse airplane that completed a 26-hour flight powered exclusively by solar energy for the first time in the history of aviation, a new prototype is under construction. It will be equipped with 22,000 photovoltaic cells made by SunPower, its official supplier.

38 DIVERSIFY

lentiful, renewable and versatile, biomass is definitely an energy resource of the future. Converted by means of combustion, gasifica-tion or chemical or biochemical processes, biomass already accounts for about 10% of the global energy mix. Right now, it is the only renewable alternative to fossil fuels for providing liquid transportation fuels and building block molecules for chemicals.

Industrial ApplicationsBiomass has a variety of industrial applications, including fuels, plastics and lubricants. However, it will still take major technological advances before it will be feasible to tackle large-scale, modern, sus-tainable commercialization of biomass. Complex environmental and social issues also have to be con-sidered, notably ensuring that biomass does not compete with food supply. Always bearing this in mind, Total is involved in several research projects, such as Futurol and BioTfueL (see sidebar).

Commercial Biodiesel on the HorizonAt the same time, we have been investing since 2010 in an ambitious R&D program conducted jointly with researchers at Amyris, a Silicon Valley start-up considered one of the most promising in the biotechnology field. The program has now branched out from an initial bio-jet fuel project. In late 2011, Total and Amyris stepped up their part-nership to expedite the development of Biofene and create a biodiesel using this plant-sourced, sugar-derived molecule. A joint venture will hold the exclusive rights to produce and market biodiesel and bio-jet fuel worldwide. It is a big step for us, as we position ourselves as a major biofuel supplier.

Together with solar, biomass is the other renewable resource we are counting on to prepare the future and round out our line of energy solutions. Promising pathways are emerging not just for fuels, but for lubricants and chemicals too.

MEETING THE CHALLENGES OF BIOTECHNOLOGY

p

INVENTING NEW BIOFUELS BioTfueL is an R&D program dedicated to second-generation diesel and bio-jet fuel. It is based on thermochemically converting lignocellulosic biomass, such as forest waste, plant waste and straw. Two demonstration units have been set up in France, one in Dunkirk and the other in Venette. Full-scale testing should be complete by end-2017, with commercial production targeted for 2020. The Futurol project aims to produce second-generation bioethanol, also from lignocellulosic biomass. In 2011, the Pomacle-Bazancourt