Total E&P France (TEPF) has been dealing with the challenge of managing a declining gas field and its local impact for many years at our Lacq site. Although production is expected to continue to 2013, we have been proactively addressing the consequences of its eventual shutdown on the local industrial and economic base for some time now.

Regional industry around Lacq in southwestern France is a direct outgrowth of the discovery and operation of the natural gas field beginning in 1951. The industrial complex that originally sprang up around natural gas later diversified into chemical manufacturing.

To support the region’s transition to non-gas-dependent activities, Total is deploying various tools to spur its continued development after gas production ends.

Participating in Local Co-Development Organizations

The economic revitalization policy for the Lacq area has been taking shape for more than 30 years, in concert with all of the stakeholders in the region’s industrial future. The Chemparc joint venture, for example, comprises representatives of national and local government, the university, labor unions and manufacturers and serves as a base for the cooperative implementation of business and job creation initiatives throughout the region. Chemparc consists of four manufacturing hubs, in Lacq, Mourenx, Mont and Pardies, with a total of roughly 4,000 direct jobs.

Attracting New Business Activity Through Company Hosting

Total has supported the creation of cost-carrying and hosting organizations to provide incentives for new manufacturing companies to locate in the area since 1975. These organizations pool services such as safety, maintenance, raw materials procurement and waste collection and storage.

• Sobegi in Mourenx: Total’s company support policy in the region debuted in 1975, with the creation of Société Béarnaise de Gestion Industrielle (Sobegi), a company that manages a hub for fine and specialty chemical manufacturers. A Total service subsidiary, Sobegi develops and deploys shared resources for the hub, including for utilities, waste and sensitive raw materials. It encompasses eight fine chemical companies, representing a total of 600 jobs to date.
• Induslacq in Lacq: Founded by TEPF in 2000, this organization offers a comprehensive range of utilities and services onsite. Most of the businesses that have located there are chemical companies. In 2006, Abengoa Bioenergy France chose Induslacq for its new bioethanol production unit, scheduled to begin operating in early 2008. The project will create 100 new direct jobs and around 150 indirect ones. At end-2006, Induslacq had provided 270 jobs, with a target of 400 by end-2008.

Support for Small Businesses

As in other regions, Total has for many years implemented a company support policy through our subsidiary Total Développement Régional, created in 1978 to help mitigate the fallout from industrial restructuring. Since then approximately 250 small businesses have received total financial aid of €52 million, maintaining 7,000 jobs in the Lacq region. The money has funded technological support and skills transfer, support for international development and exports, financial backing to create, acquire or expand businesses and industrial hosting.

Site reclamation is an integral part of the end-of-life management of fields

In the Aquitaine region of France, where Total has played a major part in oil and gas exploration and production, the already generously funded reclamation program (around €30 million so far) continued in 2006, with more than €20 million allocated to restore various sites.

	Redeployment of TEPF’S Activities With a key stake in managing the Lacq field’s decline, TEPF has adapted to the new situation and introduced training and R&D programs showcasing the site’s technical and industrial expertise. In the area of training, TEPF created an industrial risk training center for Total and outside companies in 2004. At end-2006, 425 people had taken courses, half of them non-Total employees. Besides enhancing the safety of TEPF teams, the course also helps to promote a culture of safety throughout the region, a key issue given the chemical industry’s strong presence there. The Lacq site is home to two R&D pilot projects. The first, SPREX, an acronym for Special PRE-EXtraction, debuted in February 2005 and should eventually help develop very sour gas reserves in the Near East and Caspian Sea. It is a natural progression for the site, which pioneered the development of sour gas. The second project is developing a CO2 capture and sequestration pilot. One of the site’s five existing steam generators will be converted for use in capturing CO2 emissions, compressing them and injecting them into a depleted gas reservoir in the Lacq region. The pilot is scheduled to begin operations in 2008, after two years of study and preparation. It will be the first French demonstration project in this field.

	Supporting Businesses Our long-standing commitment to supporting companies focuses on small and medium-sized businesses near our facilities. Deployed for nearly 25 years in France, it has benefited more than 3,000 businesses. In addition to industrial hosting in southwestern France, this policy is implemented through three channels: In 2006, 56 companies benefited from our knowledge and expertise through technological support and experience sharing. A total of 123 companies received support for exports and international development to our host countries, in the form of intern or co-op placements in our subsidiaries for prospecting. In addition, four business missions were organized in Germany, the United Kingdom and the United Arab Emirates in 2006. A further 133 companies received financial support to create, acquire or expand small and medium-sized businesses, corresponding to 1,695 job commitments in 2006. To consolidate and expand this commitment, on March 28, 2007 Total’s senior management and European Union federations signed a Europe-wide agreement on support for small and medium-sized businesses near our main European facilities. Employee intrapreneurs who would like to create or acquire a business will be given time off work and will have access to advice, resources, technical support and financial aid.

	Our Accomplishments at End-2006 280 small and medium-sized businesses helped in France Similar programs launched or continued in non-OECD countries (Congo, Madagascar, South Africa, Angola)