Azerbaijan

• Gas deliveries to Turkey and Georgia from the Shah Deniz field continued throughout 2010, at a lower pace for Turkey due to weaker demand. In 2010, SOCAR, the Azerbaijan state-owned company, took gas quantities superior to those provided for by the agreement. An agreement was made with Botas, a Turkish state-owned company, to revise the price of gas sold to Turkey as part of Shah Deniz Phase 1, applicable with retroactive effect from April 15, 2008.
  Development studies and business negotiations for the sale of additional gas needed to launch a second development phase in Shah Deniz continued in 2010. SOCAR and Botas signed in June 2010 a Memorandum of Understanding for the sale of additional gas volumes and the transfer conditions for volumes intended for the European market. This agreement is expected to allow FEED studies to start in 2011 for the second phase
  
• On the BTC oil pipeline, notably used to transport the condensates produced at Shah Deniz, equipment was installed in 2009 to inject additives to reduce drag. This resulted in the oil pipeline capacity increasing from 1 Mb/d to 1.2 Mb/d.

In 2009, Total and SOCAR signed an exploration, development and production sharing contract for a permit located on the offshore Absheron block. Total (40%) is the operator during the exploration phase and a joint operating company will conduct operation during the development phase. Drilling of an exploration well started in early 2011.

Kazakhstan

In Kazakhstan, Total has been present since 1992 through the interest it holds in the North Caspian Sea permit, which includes notably the Kashagan field where the substantial reserves may eventually allow production to reach more than 1 Mb/d (in 100%).

The Kashagan project is expected to be developed in several phases. The development plan for the first phase (300 kb/d) was approved in February 2004 by the Kazakh authorities, allowing work to begin on the field. Drilling of development wells, which began in 2004, continued in 2010. The consortium continues to target first commercial production by year-end 2012.

The agreements signed in October 2008 by members of the North Caspian Sea Production Sharing Agreement (NCSPSA) consortium and the Kazakh authorities ended the disagreement that began in August 2007. The implementation of these agreements led to a reduction of Total’s share in NCSPSA from 18.52% to 16.81%. The operating structure was reconfigured and the North Caspian Operating Company (NCOC), a joint operating company, was entrusted with the operatorship in January 2009. NCOC supervises and coordinates NCSPSA’s operations.

Russia

In Russia, where Total has been present since 1989,the Group’s production was 10 kboe/d in 2010, compared to 12 kboe/d in 2009 and 8 kboe/d in 2008. Production comes mainly from the Kharyaga field (40%, operator).

• In July 2007, Total and Gazprom signed an agreement for the first phase of development on the giant Shtokman gas and condensates field, located in the Barents Sea. Shtokman Development AG (Total, 25%) was created in February 2008 to design, build, finance and operate the first development phase with an expected overall production capacity of 23.7 Bm3/y (0.4 Mboe/d).
  
  Engineering studies are underway with an investment decision expected in March 2011 for the portion of the project that will allow the transport of gas by pipeline through the Gazprom network(offshore development, gas pipeline and onshore gas and condensates processing facilities - Teriberka site), with a final investment decision expected in 2011, and for the LNG part of the project that will allow the export of 7.5 Mt/y of LNG from a new harbor located in Teriberka, representing approximately half of the gas produced by the first development phase.
• In December 2009, Total finalized the acquisition from Novatek of a 49% interest in Terneftegas, which holds a development and production license on the onshore Termokarstovoye field. An appraisal well was drilled in 2010, the results of which are expected to lead to a final investment decision by year-end 2011.
• On the Kharyaga field, work related to the development plan of Phase 3, approved in December 2007, is ongoing. This development plan is intended to maintain plateau production at the 30 kboe/d (in 100%) level reached in late 2009. In December 2009, Total signed an agreement, effective January 1, 2010, to sell 10% of the field to
  state-owned Zarubezhneft, and decreased its interest to 40%.
• In October 2009, Total signed an agreement establishing the principles of a partnership with KazMunaiGas (KMG) for the development of the Khvalynskoye gas and condensates field, located offshore in the Caspian Sea (under Russian jurisdiction) on the border between Kazakhstan and Russia. Gas production is expected to be transported to Russia. Pursuant to this agreement, Total is planning to acquire a 17% interest on KMG's share.
•  On March 2, 2011, Total and Novatek signed two agreements in principle providing for:
  - Total becoming the main international partner on the Yamal LNG project with a 20% interest, and Novatek holding a 51% interest in the project. As part of the agreement, the transaction is expected to be closed by July 2011.
  - Total taking a 12.08% interest in Novatek with both parties intending that Total increases its interest to 15% within 12 months and to 19.40% within 36 months.

Source : Registration Document 2010