2014 Results outlook and February 2015
Safety
Safety and operational efficiency go together Safety performance Improving both safety and operational efficiency TRIR and LTIR* 94 540 million man-hours 2.6 1.8 455 1.3 TRIR 0.7 LTIR 90 2012 2014 2010 2011 2012 2013 2014 Refining & Petrochemicals TRIR R&P availability ( % ) Improving safety performance by 50% over past four years 2014 flaring target achieved Reducing costs without compromising safety Mm 3 /d, excl. start-ups Enhancing efficiency by reducing flaring and monetizing 15 associated gas -50% Safety as a cornerstone of our strategy 2005 2014 * TRIR: Total Recordable Injury Rate; LTIR: Lost Time Injury Rate 2014 Results & outlook – total.com 3
Market environment
Sharp oil price decline, return to volatility Brent and ERMI Gas 100 99 $/b 15 14 $/Mbtu 8 $/Mbtu 50 5 4 $/Mbtu 19 $/t 2006 2010 2014 2006 2010 2014 Brent ($/b) ERMI* ($/t) Asia LNG proxy NBP Henry Hub Total’s response is to reduce breakevens As of 6 Feb. 2015; * European Refining Margin Indicator 2014 Results & outlook – total.com 5
Long term oil demand growth Oil supply-demand Mb/d, crude and NGLs Oil demand 0.6% CAGR ~50 Mb/d new production needed by 2030, 100 >90 $/b driven by decline rate and demand growth 60-90 $/b ~20% of new volumes require >90 $/b <60 $/b North in 2014 cost environment America Decline ~50 Mb/d of incremental Marginal supply requires high tech , production* OPEC continuous innovation and significant investment 2013 2030 Fundamental support for high long term prices * Breakeven for IRR 15% nominal 2014 Results & outlook – total.com 6
Robust LNG fundamentals LNG supply-demand Mt/y LNG demand Demand to double by 2030, ~4% most of new supply not yet sanctioned CAGR 500 >14 $/Mbtu New projects require adequate LNG prices Potential 12-14 projects • New LNG countries $/Mbtu • US export economics <12 $/Mbtu Sanctioned 250 Total well positioned • Projects already sanctioned with Decline Incremental favorable price formula production* • Low breakeven projects • Integrated along the entire LNG chain 2013 2030 with strong trading position High LNG prices required to encourage investment * Breakeven for IRR 15% nominal 2014 Results & outlook – total.com 7
Corporate outlook
Capitalizing on resilient fundamentals Lowest technical costs compared to peers* $/boe Leveraging Upstream strengths • Lowest technical costs among Majors 25 • Expanding cost reduction initiatives • Highest contribution from PSC among Majors • Delivering cash accretive start-ups 2005 2010 2014 Strong contribution from Downstream • Restructuring R&C to keep lowering breakeven European Refining & • M&S providing stable results through the cycle Petrochemicals breakeven $/t, on net operating income Robust balance sheet , prepared to temporarily gear up as necessary 30 -50% Resilient and integrated business model 2011 2014 * BP, Chevron, Exxon, Shell - based on published data 2014 Results & outlook – total.com 9
Strong response to 2015 environment Cost reduction initiatives on Capex, Opex and exploration B$ 4 B$ ~4 B$ cash impact from cost reduction initiatives • >10% organic Capex reduction from 26.4 B$ to 23-24 B$ • 50% increase in Opex savings to 1.2 B$, including ‒ recruitment freeze in Upstream and R&P 2014 2015 ‒ headcount reduction in M&S mature areas ‒ 15% Corporate staff reduction by 2017 Cash flow from Upstream start-ups B$, Brent 70 $/b • 30% reduction in exploration budget to 1.9 B$ 1.5 B$ ~1.5 B$ additional cash flow from Upstream start-ups 2014 2015 ~3 B$ incremental net asset sales including Accelerated asset sale program 1.5 B$ accelerated 2015-17 asset sale program B$ 3 B$ 8 B$ cash impact reducing breakeven by 40 $/b 2014 2015 2014 Results & outlook – total.com 10
Staying the course to deliver cash Group free cash flow Upstream free cash flow growth B$ compared to peers* Base 100 in 2014 100 $/b 80 $/b 10 70 $/b 70 $/b 100 2014 2015 2016 2017 2014 2015 2016 2017 2015 2017 Objective to generate >10 B$ free cash flow Leading cash flow growth driven by in 2017 with additional flexibility in case of accretive start-ups and production growth lower oil prices Reducing Capex as projects start up 2017 dividend more than covered at 70 $/b Strong and resilient cash flow growth Free cash flow = cash flow from operations - organic investments - acquisitions + asset sales * BP, Chevron, Exxon, Shell. Source Wood Mackenzie Oct. 2014 low price scenario 2014 Results & outlook – total.com 11
2014 results
2014 results 2014 adjusted net income 2014 after-tax impairments Oil sands 12.8 B$ Unconventional Upstream 7.1 B$ gas European refining Refining & Chemicals Marketing & Services Corporate Other Return to production growth in 2H14 6.5 B$ after-tax impairment in 4Q14 due with CLOV start-up to changing context Refining & Chemicals benefiting from 2% impact on end-2014 gearing restructuring and improved 2H14 margins Results benefiting from integrated model, with one-offs reflecting current environment 2014 Results & outlook – total.com 13
2014 cash flow allocation 2014 cash flow allocation B$ 30 B$ 30 B$ from operations and asset sales Acquisitions Change in net debt 4.8 B$ asset sales closed Asset sales Organic Organic investment reduced to investment 26.4 B$ in line with 2014 budget Cash flow from operations 31% gearing excluding benefit of 4 B$ pending asset sales at end-2014 Dividend 7.3 B$ dividend Strong dividend through intensive investment phase Asset sales including transactions with minority interests 2014 Results & outlook – total.com 14
Actively managing the portfolio 2011-14 asset sales and acquisitions 2015-17 asset sales B$ B$ 10 B$ target 28 B$ 23 B$ Non-core Other Midstream & 4 B$ downstream signed Upstream Nigeria onshore Total Gaz In progress Simplification, Coal mines farm-outs & exits Bostik Asset sales Acquisitions End-2014 2015-17 Rejuvenating >25% of portfolio Closed ~2 B$ Bostik sale early 2015 2012-14 target achieved Significant progress on 2015-17 program High-grading portfolio and focusing on core assets Including transactions with minority interests 2014 Results & outlook – total.com 15
Substantial liquidity and financial flexibility Net-debt-to-equity ratio B$ Liquidity established in advance of lower oil price • >15 B$ net cash • >10 B$ credit lines Net debt 100 Access to financial markets under favorable conditions Equity Gearing impacted by heavy investment phase and one-offs Flexibility to control gearing 22% 23% 31% Gearing • Strong response to 2015 environment 2012 2013 2014 • Proposed scrip dividend Well positioned to weather the storm 2014 Results & outlook – total.com 16
Upstream
Increasing Upstream profitability Safety , cornerstone of our strategy Delivery • Executing projects on time and on budget • Growing production with major project start-ups Costs • Increasing Opex savings • Enhancing capital discipline Cash • Strong cash flow growth driven by accretive start-ups • Dynamic portfolio management Accountability key to unlocking performance 2014 Results & outlook – total.com 18
2015 production growth Production 8 project start-ups in 2015 >8% • Including 3 already in production 2.15 New projects Mboe/d ADCO 125 kboe/d from new projects • ~60% Total-operated • ~60% deep offshore • ~50% PSC Successful entry into new ADCO contract ~1.5 B$ additional cash from new projects 2014 2015 Focusing on project execution and delivery 2015 in a Brent 70 $/b scenario 2014 Results & outlook – total.com 19
2014 reserve replacement rate of 100% Proved reserves Organic reserve replacement rate Bboe at year end 3-year average 111% 11.5 11.5 92% Portfolio changes Production Additions Organic reserve replacement rate of 125% 2013 2014 2009-11 2012-14 More than 13 years of 1P and 20 years of 2P reserves 2014 Results & outlook – total.com 20
2015 Upstream Capex and Opex 2015 Capex discipline 2015 Opex reduction B$ B$ 10 23 B$ Greenfield 0.8 B$ Initial Brownfield New Growth ~20 B$ Reduction 18 6 2014 2015 2014 2015 Reducing greenfield investment Doubling 2015 Opex reduction • Utica, Zinia 2, Bonga SW… • Reducing staff to ~15,500 end-2015, logistics… Cutting marginal brownfield spend Taking advantage of market conditions • Mature West Africa, North Sea... • Renegotiating contracts, service costs… Immediate and significant response to 2015 environment 2014 Results & outlook – total.com 21
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