Elf Aquitaine today announces more details of its cash and share offer for TotalFina and the financial rationale for its new industrial project creating the world's 4^th largest oil and gas group and the world's 5^th largest chemicals group through a demerger. The figures used in this presentation are from Elf management's forecasted plan.

This information will be presented separately in a "Note d'information" subject to the authorization of the French stock exchange regulatory authorities, the Commision des Opérations de Bourse.The whole presentation is available on the Elf Aquitaine website (www.elf.com).

Highlights of the proposal are as follows:

• Demonstrable synergies of more than 2.5bn euros – twice TotalFina's announced level. This level of synergies represents approximately 11% of capital employed, in line with the other mergers in the oil industry.

• A newly created listed chemicals company well-positioned to lead the consolidation process in the industry with estimated:
  • 1999 EBITDA of 1.8bn euros growing at 16.1% per annum between 1999 and 2003
  • 1999 net income of 0.5bn euros growing at 27.6% per annum between 1999 and 2003
  • 1999 ROACE of 6.5 % and a targeted ROACE of 13.5% (mid-cycle)
  • Total capital expenditures for the period 1999-2003 amount to 5.6 bn euros
  • 1999 net debt of 5.5bn euros decreasing to 4.7bn euros in 2003; leverage of 36% and 28% in 1999 and 2003 respectively; EBITDA coverage ratio of 9.9 and 25.2 in 1999 and 2003 respectively.

• A pure play oil company with superior profitability prospects with estimated :
  • 1999 EBIT of 5.0bn euros growing at 18.4% per annum between 1999 and 2003 assuming $15/bbl
  • 1999 net income of 2.4bn euros growing at 21.8% per annum between 1999 and 2003 assuming $15/bbl
  • 1999 ROACE of 9.5% and a targeted ROACE of 15.0% and18.0% in 2001 and 2003 respectively with a $15/bbl assumption
  • Under a $12/bbl assumption, the targeted ROACE is 12.6% in 2001 and 15.3% in 2003
  • Total capital expenditures for the period 1999-2003 amount to 27.1bn euros
  • 1999 net debt of 17.2bn euros decreasing to 9.6bn euros in 2003; leverage of 55% and 28% in 1999 and 2003 respectively; EBITDA coverage ration of 6.7 and 13.3 in 1999 and 2003 respectively.

• Optimal capital structure poised to deliver higher shareholder value with cost of capital of 6.7% and 6.6% for Oilco and Chemco respectively, compared with roughly 7.2% for the TotalFina project

(N.B. All figures excluding goodwill)

Commenting today's announcement Philippe Jaffré, Chairman and CEO of Elf Aquitaine said:

"I believe that facts and evidence will demonstrate much more value to our shareholders than TotalFina has promised under its proposal.

Our proposal to de-merge chemicals has compelling industrial and financial logic. The evidence we are presenting to the market today demonstrates that the creation of 'pure play' oil and chemical companies will bring about a significant uplift in the valuation of the companies' assets by the market.

In an uncertain macro-environment for oil, it is essential that we build a company that is focused on cost reduction and capital efficiencies in order to remain profitable in an environment of prolonged pressure on oil prices. Our management track record demonstrates that we are better positioned to achieve this."

Public research demonstrates the strong relationship between the return over the cost of capital and the value creation credited by the stock market over the capital invested. When looking at various industries, as well as the oil and chemical companies, we observe a strong correlation between ROACE/WACC (the Return on Average Capital Employed divided by the Weighted Average Cost of Capital) and EV/CE (the Enterprise Value divided by the Capital Employed).

This analysis shows that the driver of value for corporation is the spread between return and cost of capital. According to market studies, Elf's ROACE/WACC spread has historically been higher than Total's.

Elf believes it industrial plan offers a better alternative on both sides of the equation.

• First, due to Elf's management ability to extract greater synergies, it will generate higher returns. This is illustrated by Elf's superior track record at cutting costs and by the small State involvement in Elf. The Elf management believes the 2.5bn euros of synergy savings are achievable.

• Second, by using approximately 13bn euros of cash in the transaction, Elf plans to improve the capital structure and reduces its weighted average of capital. Based on our estimates, Oilco cost of capital should be 6.7% compared to 7.4% for its peer group, whereas Chemco cost of capital should be 6.6% compared to 7.2% for its peer group. Those costs are lower than what the TotalFina project could achieve, i.e. around 7.2%.

Finally, under the TotalFina project, the weight of the petrochemical business in the chemical business is not in line with the other companies in the oil sector, which have approximately 10% to 12% of sales in chemicals, of which 80% in petrochemical. Elf believes that integrated companies such as Chemco should be more directly comparable to companies such as BASF, Dow and Bayer, which have approximately 20% of sales in petrochemicals, while the remaining 80% is in intermediate and specialty chemicals.

The Elf project will result in better value creation for Oilco and Chemco as a result of the creation of two pure players, higher synergies and optimal capital structure, which will allow the two groups to generate higher returns and lower cost of capital.

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This document is neither an offer to exchange or sell nor a solicitation of an offer to exchange or buy any of the securities mentioned herein, and the Offer to which this document relates is not being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities laws of the jurisdiction.

This document may contain forward-looking statements with respect to the financial condition, results of operations, business, strategy and plans of the Elf Group. In particular, statements using the words "expects", "anticipates", and similar expressions, and statements with regards to management goals and objectives, expected or targeted production data, trends in results of operations, margins, or the expected benefits of the tender offer referred to herein are forward-looking in nature. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations and general economic and business conditions. The Group does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the company's financial results is provided in documents filed with the Commission des Opérations de Bourse and the US Securities and Exchange Commission.