Our exploration and production activities are conducted under agreements and contracts with host countries.
The signatories are usually the national oil company, which represents the government, and foreign oil companies, which are its partners in carrying out the project. The agreements spell out the obligations of the partners, including exploration work, possible carrying by the foreign partner of the national company’s share of costs, the timetable for production startup in the event of a commercial discovery, local recruitment and training. The contracts stipulate how the production will be shared between the host country and its partners and establish how profits will be taxed.

Because oil and natural gas projects require very long-term, substantial financial commitments, oil companies need stable legal and tax environments that do not change every time the local political environment changes. Oil companies are sometimes criticized for their unwillingness to revise older contracts, which were entered into when oil and gas prices were lower, oil technology less advanced or the local political situation different. Total’s position is as follows:

• We pay close attention to the stability of our investments’ legal framework, which reflects industry-wide standards.
• Our operations, especially in Africa, are usually carried out under production sharing agreements that generally include adjustment mechanisms that guarantee the host government an increasing share of production once output exceeds a certain level and when prices rise.