5.1. Major investments over the 2012-2014 period
(1)(M$) 2014 2013 2012
Upstream 26,520 29,750 25,200 Refining & Chemicals 2,022 2,708 2,502 Marketing & Services 1,818 1,814 1,671 Corporate 149 159 102
Total 30,509 34,431 29,475
(1) Including acquisitions. The main acquisitions in fiscal years 2012-2014 are detailed in Note 3 to the Consolidated Financial Statements of this Registration Document. (2) The Group held an 18.24% stake in OAO Novatek as of December 31, 2014.
Taking into account the current economic environment, the organic investment budget has decreased by more than 10% from $26.4 billion in 2014 to $23-24 billion in 2015. In particular, the Group has reduced investments in brownfield developments that have become less profitable due to the decline in Brent. The decrease in investments is part of the Group’s strong and immediate response to reduce its cash break-even point by 40 $ / b without compromising the priority to safety.
Investments in the Upstream segment are expected to amount to $20 billion and will mainly be allocated to major development projects, including Ichthys in Australia, Surmont and Fort Hills in Canada, Moho North in the Republic of the Congo, Kaombo in Angola, Egina in Nigeria and Yamal in Russia. A significant portion of the segment’s budget will also be allocated to maintenance and integrity work on assets already in production.
The Refining & Chemicals segment has an investment budget of approximately $1.5 billion, which is expected to be allocated to the refining, petrochemicals and specialty chemicals businesses. The modernization of the integrated platform in Antwerp, Belgium is the largest investment in the segment in 2015. A significant portion of the segment’s budget will also be allocated to the maintenance and safety investments required for these types of industrial activities. The Marketing & Services segment has an investment budget of approximately $1.5 billion, which is expected to finance, in particular, the service station network, logistics, specialty products production and storage facilities (lubricants, LPG, etc.) and the development of its activities in New Energies. Most of the Marketing & Services budget will be allocated to growth areas (Africa, Middle East, Asia and Latin America).
After 2015, TOTAL expects investments to be in line with more moderate post-2017 growth from a larger production base. The Group monitors the evolution of the Brent price and will consequently adapt its investments without compromising its medium-term objectives.
TOTAL self-finances most of its investments from its excess cash from operations (refer to the consolidated statement of cash flows, point 5. of Chapter 10), which is mainly supplemented by accessing the bond market on a regular basis, when conditions on the financial markets are favorable (refer to Note 20 to the Consolidated Financial Statements, point 7. of Chapter 10). However, investments for certain joint ventures between TOTAL and external partners are funded through specific project financing.
Active management of the asset portfolio, which is fully integrated into the Group’s strategy, creates value and TOTAL has confirmed its 2015-17 asset sale program of $10 billion. In addition, the Group makes targeted acquisitions. As the first international company to enter the new ADCO concession in Abu Dhabi, TOTAL demonstrated its ability to access resources under good conditions and create strong partnerships in a strategic region offering various development opportunities.
As part of certain project financing arrangements, TOTAL S.A. has provided guarantees. These guarantees (“Guarantees given on borrowings”) as well as other information on the Group’s off-balance sheet commitments and contractual obligations appear in Note 23 to the Consolidated Financial Statements (point 7. of Chapter 10). The Group currently believes that neither these guarantees nor the other off-balance sheet commitments of TOTAL S.A. or of any other Group company have, or could reasonably have in the future, a material effect on the Group’s financial position, income and expenses, liquidity, investments or financial resources.
The sale of TOTAL’s stake in offshore Block OML 138 in Nigeria, including the Usan field, announced in November 2012 was not able to close. The Group is actively pursuing efforts to sell this asset.
Business overview
2
Organizational structure
TOTAL has freehold and leasehold interests in over 130 countries throughout the world. Operations in properties, oil and gas fields or any other industrial, commercial or administrative facility, as well as the production capacities and utilization rates of these facilities, are described in this chapter for each business segment (Upstream, Refining & Chemicals, Marketing & Services).
A summary of the Group’s property, plant and equipment and their main related expenses (depreciation and impairment) is included in Note 11 to the Consolidated Financial Statements (point 7. of chapter 10).
Minimum royalties from finance lease agreements regarding properties, service stations, vessels and other equipment are given in Note 22 to the Consolidated Financial Statements (point 7. of chapter 10).
Information about the Company’s environmental policy, in particular that related to the Group’s industrial sites or facilities, is presented in chapter 7 – Social and environmental information of this Registration Document
7. Property, plant and equipment
A list of the major subsidiaries directly or indirectly held by the Company is given in Note 35 to the Consolidated Financial
Statements (Scope of Consolidation) in point 7. of chapter 10 of this Registration Document.
6.2. Company subsidiaries
TOTAL S.A. is the Group’s parent company. As of December 31, 2014, there were 903 consolidated subsidiaries, of which 818 were fully consolidated and 85 were accounted for under the equity method. The decision of TOTAL S.A.’s major subsidiaries to declare dividends is made by their relevant Shareholders’ Meetings and is subject to the provisions of applicable local laws and regulations. As of December 31, 2014, there is no restriction under such
provisions that would materially restrict the distribution to TOTAL S.A. of the dividends declared by those subsidiaries.
The Group’s businesses are organized as indicated on the chart in point 8. of this chapter. The Group’s businesses receive assistance from Corporate divisions (Finance, Legal, Ethics, Insurance, Strategy & Business Intelligence, Human Resources and Communications) that are grouped within the parent company, TOTAL S.A.