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Exploration & Production Operations in Europe

In 2012, Total’s production in Europe was 427 kboe/d, representing 19% of the Group’s overall production, compared to 512 kboe/d in 2011 and 580 kboe/d in 2010.

Bulgaria

In Bulgaria, the Khan Asparuh license (100%, operator), which covers 14,220 km2 in the Black Sea, was awarded to Total in July 2012 and a concession agreement was signed in August 2012. Total has agreed to collect the seismic data and to drill two wells during the five-year term of the contract. An agreement to divest 30% stakes to OMV and Repsol was concluded in November 2012. Under the terms of this agreement, OMV will be the operator in the seismic phase and will then hand over the operatorship to Total.

Cyprus

In Cyprus, Total is present on two deep offshore exploration licenses for Blocks 10 and 11, which were obtained in the second offshore exploration round launched by the Cypriot government in 2012. Total signed two production-sharing contracts at the beginning of 2013 for these blocks which extend over 2,572 km2 and 2,958 km2, respectively, and are located in the southwest of Cyprus, in water depths ranging from 1,000 m to 2,500 m. The exploration of these blocks will begin with seismic surveys.

Denmark

In Denmark, Total has owned since 2010 an 80% stake in and the operatorship for licenses 1/10 (Nordjylland) and 2/10 (Nordsjaelland, formerly Frederoskilde). These onshore licenses, the shale gas potential of which has yet to be assessed, cover areas of 3,000 km² and 2,300 km², respectively. Following geoscience surveys on license 1/10 in 2011, the decision was made to drill a well. Initially planned for 2013, this well is expected to be delayed due to additional environmental studies requested by the local authorities. Geoscience surveys are ongoing on license 2/10.

France

In France, the Group’s production was 13 kboe/d in 2012, compared to 18 kboe/d in 2011 and 21 kboe/d in 2010. Total’s major assets are the Lacq (100%) and Meillon (100%) gas fields, located in the southwest part of the country.

On the Lacq field, operated since 1957, a carbon capture and storage pilot was commissioned in January 2010. In connection with this project, a boiler has been modified to operate in an oxy-fuel combustion environment and the carbon dioxide emitted is captured and re-injected in the depleted Rousse field. As part of Total’s Sustainable Development policy, this project will allow the Group to assess one of the technological possibilities for reducing carbon dioxide emissions. Most of the objectives of the experiment having been reached, the injection of carbon dioxide, came to an end in the first quarter 2013. For additional information, see Chapter 12.

Agreements were signed in December 2011 for the sale of the Itteville, Vert-le-Grand, Vert-le-Petit, La Croix Blanche, Dommartin Lettrée and Vic-Bilh assets. The operation of these concessions and the production rights were transferred in January 2012. Agreements for the sale of the Lacq, Lagrave and Pécorade assets were also signed in February 2012. These agreements remain subjet to approval by the authorities, expected in 2013.

The Montélimar exclusive exploration license, awarded to Total in 2010 to assess, in particular, the shale gas potential of the area, was revoked by the government in October 2011. This revocation stemmed from the law of July 13, 2011, prohibiting the exploration and extraction of hydrocarbons by drilling followed by hydraulic fracturing. The Group had submitted the required report to the government, in which it undertook not to use hydraulic fracturing in light of the current prohibition. An appeal has therefore been filed in December 2011 with the administrative court requesting that the judge cancel the revocation of the license. <p>

Italy

In Italy, the Tempa Rossa field (75%, operator), discovered in 1989 and located on the unitized Gorgoglione concession (Basilicate region), is one of the Group principal exploration and production assets in the country. In March 2013, Total has finalized an agreement to sell a 25% interest in the Tempa Rossa fields. The transfer of interests will take effect after the Italian authorities have approved the transactions.

In 2011, Total Italia acquired an additional 25% stake in the Tempa Rossa field, thereby increasing its share to 75%, as well as an interest in two exploration licenses. Although preparation work started in early August 2008, the proceedings initiated by the Prosecutor of the Potenza Court against Total Italia led to a freeze in the preparation work (for additional information, see paragraph 5., Chapter 7, Legal and arbitration proceedings). New calls for tenders were launched related to certain contracts that had been cancelled.

Drilling of the Gorgoglione 2 appraisal well that started in June 2010 reached its final depth and was tested in 2012, confirming the results of the previous wells. The final investment decision was made in July 2012, following the approval of the state and regional authorities. The extension plan for the Tarente refinery export system, needed for the development of the Tempa Rossa field, was approved at the end of 2011. Start-up of production is expected in 2016 with a capacity of 55 kboe/d.

Norway

In Norway, where the Group has had operations since the mid- 1960s, Total has equity stakes in ninety-one production licenses on the Norwegian continental shelf, twenty-three of which it operates. In 2012, the Group’s production was 275 kboe/d, compared to 287 kboe/d in 2011 and 310 kboe/d in 2010. 90 kboe/d is from the Greater Ekofisk Area located in the southern sector of the North Sea, 106 kboe/d comes from the central and northern portions of the North Sea and 79 kboe/d comes from the Haltenbanken region and the Barents Sea.

In the Norwegian North Sea, where a numerous of development projects have just been launched, the most substantial contribution to the Group’s production, for the most part non-operated, comes from the Greater Ekofisk Area (e.g., Ekofisk, Eldfisk, Embla).

Several projects are underway on the Greater Ekofisk Area, located in the south. The Group owns a 39.9% stake in the Ekofisk and Eldfisk fields. The Ekofisk South and Eldfisk 2 projects, each with a capacity of 70 kboe/d, were launched in June 2011 following approval of the development and operation plans by the authorities. The production is scheduled to start in 2014 for Ekofisk South and in 2015 for Eldfisk 2. The project relating to the construction and installation of the new Ekofisk accommodation and field services center platform is now in its third year.
On the Greater Hild Area, located in the north and in which the Group has a 51% stake (operator), the Martin Linge development scheme (capacity of 80 kboe/d, formerly known as Hild) was selected at the end of 2010 and approved by the authorities in 2012, with production start-up scheduled for 2016.
The Islay field, operated by the Group and fully owned by Total, was put into production in April 2012. The Islay field extends on each side of the Norwegian/Great Britain border and the Group’s interest in the Norwegian part is 5.51%.
A number of successful exploration and appraisal activities were carried out in the North Sea in the 2010-2012 period. These activities have led to the launch of several development projects, some of them are already finalized, others are underway or are expected to be approved soon by the authorities:

In the central section of the North Sea, on license PL102C (40%, operator), a fast-track development project had been launched for the Atla field (formerly known as David), which was discovered in 2010. Gas production started in October 2012, less than two years after the discovery of the field.
Gas production on the Beta West field (10%), a satellite of Sleipner, located in the central section of the North Sea, started in April 2011.
In the Visund area of the Nordic North Sea on license PL120 (7.7%), the Visund South fast-track development project for the Pan/Pandora discoveries was completed in the fourth quarter of 2012. Production started up in November 2012. Visund North, a second fast-track development project, was launched at the end of 2011 to redevelop the northern portion of the Visund field and provide development infrastructure for the nearby exploration prospects and discoveries (Titan) inside the license. Production is scheduled to start at the end of 2013. The authorities approved the extension of the PL20 license (Visund) until the end of 2034.
The Stjerne project was launched in 2011 to develop the Katla structure discovered in 2009, located on license PL104 (14.7%) south of Oseberg in the Nordic North Sea. Start-up of production is expected in 2013.
The fast-track development project of the Vigdis North East structure (PL089, sold as part of the 2012 transaction with ExxonMobil described below), which was discovered in 2009 and is located south of Snorre, was launched in 2011.
A positive appraisal well was drilled in 2010 on the southern slope of the Dagny structure (38%) north of Sleipner. The development project was sanctioned at the end of 2012 and the plan of development and operation (PDO) submitted to the authorities, with an approval expected for mid-2013. Production is scheduled to start in 2017.

In the Norwegian Sea, the Haltenbanken area includes the Tyrihans (23.2%), Linnorm (20%), Mikkel (7.7%) and Kristin (6%) fields as well as the Åsgard (7.7%) field and its satellites Yttergryta (24.5%) and Morvin (6%). Morvin started up in August 2010 as planned, with two producing wells.

The Åsgard sub-sea compression project, which will increase hydrocarbon recovery on the Åsgard and Mikkel fields, was approved by the Norwegian authorities in 2012. All the main contracts have been awarded.

On the Linnorm gas field, the Onyx South exploration well is expected to be drilled in 2013. Gas from Linnorm will be exported from the Nyhamna onshore terminal through a new pipeline (Polarled project).

The Polarled project (5.11%) was sanctioned in December 2012 and the development plan was submitted to the Norwegian authorities in January 2013. The project consists in the installation of a 481 km long pipeline from the Aasta Hansen field to the Nyhamna terminal and in the expansion of the terminal.

In the Barents Sea, LNG production on Snøhvit (18.4%) started in 2007. This project included the development of the Snøhvit, Albatross and Askeladd natural gas fields, and the construction of the associated liquefaction facilities (capacity of 4.2 Mt/y). A project has been launched in 2012 with the objective of improving the performances of the plant.
Several exploration wells were successfully drilled over the 2011-2012 period:

In October 2012, Total drilled a positive exploration well on the Garantiana structure (40%, operator) on license PL554 in the Nordic North Sea. The drilling of additional exploration and appraisal wells in the license is currently under study.
In July 2012, Total announced a major gas and condensate discovery on the King Lear prospect in licenses 146 and 333 in the southern Norwegian North Sea (22.2%). An appraisal well is planned to be drilled in 2014.
In 2011, Total successfully drilled an exploration well on the Alve North structure on license PL127 (50%, operator) near the Norne field. Preliminary studies have been performed. The data from a new seismic campaign is being interpreted.
In 2011, Total drilled a positive exploration well on the Norvarg structure in the Barents Sea on license PL535 (40%, operator), which was awarded during the twentieth licensing round. The preliminary development studies have been completed and an appraisal well should be drilled in 2013.

The Group improved its asset portfolio in Norway by obtaining new licenses and divesting a number of non-strategic assets:

In the beginning of 2013, Total obtained eight new licences of which four as operator at the occasion of licensing round APA 2012 (Awards in Predefined Areas). All these licenses are localized in the Nowergian North sea: PL661 (60%, operator), PL662 (60%, operator) and PL667 (50%, operator) in the Ekofisk area, PL675 (40%) and PL676S (20%) in the central part, and PL190B (10%), PL684 (5%) and PL685 (40%, operator) in the north.
In October 2012, Total and ExxonMobil exchanged interests in a range of producing and undeveloped assets already in production or on the verge of being developed. In exchange for its interests in the PL089 license (5.6%) and in the Sygna (2.52%), Statfjord Øst (2.8%) and Snorre (6.18%) fields, Total received the interest held by ExxonMobil in the Oseberg field (4.7%), the Oseberg gas transportation system (4.33%) and the PL029c (100%) and PL029b (30%) licenses, which contain part of the Dagny field. The agreement was finalized and approved by the Norwegian authorities in the fourth quarter of 2012. Total’s share of the PL104 license is 14.7% and it holds a 38% stake in the Dagny structure. Total no longer holds a stake in license PL089.
At the beginning of 2012, during licensing round APA 2011, Total obtained eight new licenses including five as operator.
In 2011, Total obtained four new exploration licenses during licensing round APA 2010, including one as operator. The Group also acquired in 2011 a 40% stake and the role of operator of license PL554, north of Visund. The exploration well drilled on this license in 2012 resulted in the discovery of Garantiana.
In June 2011, Total announced that it had signed an agreement for the planned sale of its entire stake in Gassled (6.4%) and the associated entities. The sale became effective at the end of 2011.
In 2010, the Group divested its stake in the Valhall and Hod fields.

Netherlands

In the Netherlands, Total has had natural gas exploration and production operations since 1964 and currently owns twenty-four offshore production licenses, including twenty that it operates, and two offshore exploration licenses, E17c (16.92%) and K1c (30%). The Group’s production was 33 kboe/d in 2012, compared to 38 kboe/d in 2011 and 42 kboe/d in 2010.

The L4-D field (55.66%, operator) started production in November 2012.
A 3D seismic survey of several offshore permits covering an area of 3,500 km2 was conducted between May and September 2012. The interpretation of the results of this campaign is expected at the end of 2013.
The K4-Z development project (50%, operator) began in 2011. This development is comprised of two sub-sea wells connected to the existing production and transport facilities. Start-up of production is expected in 2013.
The K5-CU development project (49%, operator) was launched in 2009 and production started up in early 2011. This development includes four wells supported by a platform that was installed in 2010 and connected to the K5-A platform by a 15 km gas pipeline. In late 2010, Total disposed of 18.19% of its equity stake in the NOGAT gas pipeline and decreased its stake to 5%.

Poland

In Poland, at the beginning of 2012, Total signed an agreement to acquire a 49% stake in the Chelm and Werbkowice exploration concessions in order to assess their shale gas potential. A well was drilled and tested on the Chelm permit. The results from the well are being analyzed. Total asked the authorities to relinquish the Werbkowice permit in September 2012 since it did not meet expectations.

United Kingdom

In the United Kingdom, where Total has had operations since 1962, the Group’s production was 106 kboe/d in 2012, compared to 169 kboe/d in 2011 and 207 kboe/d in 2010. About 90% of production comes from operated fields located in two major zones: the Alwyn zone in the northern North Sea, and the Elgin/Franklin zone in the Central Graben. In 2012, the shutdown of the Elgin, Franklin and West Franklin fields due to a gas leak from well G4 in Elgin severely impacted production.

On the Alwyn zone (100%), start-up of satellite fields or new reservoir compartments allowed production to be maintained. Wells N54, N53 and N52 started production in May 2012, September 2011 and February 2010, respectively.

On the Dunbar field (100%), a new drilling survey (Dunbar phase IV) should begin in the middle of 2013 including three work overs and six new wells.

The production on the Islay field (94.49%, gas and condensates) started in April 2012.

In February 2012, Total finalized the divestment of its stake in the Otter field.

In October 2011, the decision was made to redevelop the Brent South West formation in Alwyn by drilling two wells: one production well, which was started in August 2012, and one water injection well, which is expected to be drilled during the second semester 2013.

In Central Graben, at the end of 2011, Total increased its stake in Elgin Franklin Oil & Gas (EFOG), a company through which it holds a stake in the Elgin and Franklin fields (46.2%, operator), from 77.5% to 100%. Following a gas leak on the Elgin field on March 25, 2012, the production on the Elgin, Franklin and West Franklin fields was stopped and the personnel of the site were evacuated.

In May 2012, Total confirmed that the leak from well G4 had been successfully stopped and at the end of October 2012, well G4 was definitively secured by installing five cement plugs.

The enquiry led by Total permitted the clear identification of the causes of the accident and the definition of new criteria for well integrity to allow the restart of the production of Elgin/Franklin in total security.

The production on the Elgin/Franklin area restarted on March 9, 2013, following the approval of the safety case by the UK Health and Safety Executive (HSE). Production is resuming gradually, and is expected to soon reach close to 70 kboe/d (approximately 30 kboe/d in Total’s share), corresponding to approximately 50% of the production potential from the fields.

In order to recover by 2015 the production level that existed before the Elgin incident, a redevelopment project envisaging drilling of new infill wells on Elgin and Franklin is currently under study.

In addition, the West Franklin Phase II development project remains ongoing with production start-up scheduled for 2014.

In addition to Alwyn and the Central Graben, a third area, West of Shetland, is undergoing development. This area covers the Laggan and Tormore fields, in which Total acquired an 80% stake in early 2010.

The decision to develop these two fields was made in March 2010 and production is scheduled to start in 2014 with an expected capacity of 90 kboe/d. The joint development scheme includes:

sub-sea production facilities,

off-gas treatment (gas and condensates) at a plant located near the Sullom Voe terminal in the Shetland Islands, 150 km away, and

a new pipeline connected to the Frigg gas pipeline (FUKA) for the export of gas to the Saint Fergus terminal.

In early 2011, a gas and condensate discovery was made on the Edradour license (75%, operator), near Laggan and Tormore. The development of Edradour East by using the infrastructures in place was decided in the end of December 2012.

In 2010, the Group’s stake in the P967 license (operator), which includes the Tobermory gas discovery, increased to 50% from 43.75%. This license is located north of Laggan/Tormore.

Total also holds a stake in three assets operated by other parties: the Bruce (43.25%), Keith (25%), and Markham (7.35%) fields. The Group’s stakes in other fields operated by third parties (Seymour, Alba, Armada, Maria, Moira, Mungo/Monan and Everest) were sold off in 2012.

Nine new licenses (three in the Northern North Sea, three in Central Graben and three in West Shetland) were awarded to Total in the twenty-seventh exploration round, the results of which were announced on October 25, 2012.

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