Total in Venezuela

Venezuela Field Trip - September 2003

www.total.com
Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

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Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

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The Venezuelan oil and gas business context

Oil:
ƒ Aggressive growth objectives (target: ≈ 5 Mb/d by 2008)
opportunities for IOCs
ƒ Implementation of the new hydrocarbon law
ƒ OPEP quota constraints

Gas:
ƒ “Apertura” licensing rounds open to private companies since 1999
ƒ Main areas of future potential developments:
- Yucal Placer
- Mariscal Sucre
- Plataforma Deltana
- New offshore areas

Restructuring of PDVSA

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 Total in Venezuela

YUCAL-PLACER SINCOR UPGRADER JUSEPIN

ARUBA CURAZAO
BARBADOS
Robalo
COLOMBIA Caribbean Sea
Ens. La Vela BONAIRE Blanquilla GRENADA
Merluza
Tuy Cariaco
Barracuda
Golfo de Venezuela Falcón Noreste

Sierra Falcón
Lisa Falcón Paria Norte
Oeste Este (Mariscal Sucre) TOBAGO
Mara Este Bonaire
La Concepción Golfo Triste Carúpano
Boscán Ensenada
Cabimas Caracas Golfo de Paria TRINIDAD
Ambrosio

Este
DZO B2X-68/79 Jose

Oeste
LL-652 B2X-70/80
2
Intercampo Norte 1 4
Tinaco Tiznado Quiamare-La Pedernales
TOMOPORO
Mene Grande
Quiriquire
Urdaneta Ceiba
La Ceiba Onado Boquerón Block 3
Oeste Maulp 5
San Kaki a Acema Casma-Anaco
Plataforma
Carlos Barbacoas Guárico Mata
re Deltana
ue
Guárico OesteEste vi-G Caracoles Oritupano-Leona Monagas Sur
Barrancas n
Sa
Colón-Rosario Dación Bitor
Cerro Negro
Hamaca

0 50 10
0 GUYANA
Petrozuata K
m

SINCOR UPSTREAM

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Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

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Jusepín background

“Reactivation of marginal fields”… “Apertura”

ƒ 1991 First round: 3 licenses
ƒ 1993 Second round: 11 licenses (including Jusepin)
ƒ 1997 Third round: 18 licenses

Total operator with 55%, BP as a partner (45%)

Jusepin is a success story among the “Convenio Operativo” contracts

ƒ Contract includes the possibility to also explore deeper horizons
ƒ This deep exploration led to substantial developments

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Jusepin development

History:
ƒ 1993 : “Convenio Operativo” signed with PDVSA
ƒ 1994-96 : Start up study pilot to evaluate shallow marginal field potential
ƒ 1996 : Discovery of Deep Jusepín
ƒ 1997 : Fast track start up of Deep Jusepín production
ƒ 2000 : Start up of gas and water injection (enhanced recovery)
ƒ 2004(e) : Completion of the injection scheme (water and gas)

b/d Mcfd

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Jusepin development scheme

Cotoperí Field
2 producers (natural depletion)

COT-2

Gas / Water Injector

COT-3
Gas / Water Injector
J-491
J-490
J-481 J-486
J-484ST
Gas / Water Injector J-489

J-483 J-485ST J-482

J-476

J-488
J-480ST
Gas / Water Injector
RESOR
J-479
J-487 Gas injection well
Production well
water
gas
Deep Jusepín Field WILPRO
Gas/water injection well
production Water injection well
• 7 producers – 4 injectors
(Miscible gas and water injection)
Development to 2003
• 4 wells to be drilled in 2003-2004
Extension 2003-2004

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Jusepin development overview

Production:
ƒ 2003 average: 30 kb/d
ƒ Cumulative production at
end-August 2003: 67 Mb
ƒ Future production 2003-2013(e):
~ 100 Mb (API = 32°)

Investment needed for:

ƒ 2 new wells in 2003
ƒ 2 new wells in 2004
ƒ Connections, injection lines
ƒ Improvement modifications

Development cost:
ƒ CAPEX: 4.1 $/b
ƒ OPEX: 2.0 $/b

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Jusepin challenges and solutions

Resolve high technical subsurface challenge

ƒ Drill and complete deep HP/HT wells (depth: 6,000 m)
ƒ “state of the art” 3D seismic processing in a deep and complex geology
ƒ Implementing an enhanced recovery strategy (EOR):
- Miscible gas alternated with water injection
- Pressure maintenance in deep horizons

Optimize use of surface facilities

ƒ Extend plateau through EOR at facilities maximum capacity
ƒ Integrate with PDVSA facilities

Operate in a demanding environment

ƒ Social development actions

Implement training and progressive HR regionalization policy

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Jusepin contract

Remuneration of the “Convenio”:

ƒ Opfee: an indexed lump sum per barrel
ƒ Capfee: recovery of invested Capex in 40 quarters
With an Interest of Libor + 1% for non recovered Capex
ƒ Overall fee capped by a maximum total fee
ƒ Incentive per barrel

Term: 2013 with possible extension

Production of Deep Jusepin has successfully met the set objectives

Financial results fully benefit from additional production

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Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

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The Faja story

54,000 km2

Extra Heavy Oil in Place:

~ 1,200 trillion barrels

Potential recoverable
reserves: 100-300 Bb ?

Developped: 8 to 10 Bb

4 strategic associations:
Sincor - Petrozuata
Cerro Negro - Ameriven

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Sincor Zuata Sweet – El Néctar de la Faja

From extra heavy crude oil To a light sweet crude

ƒ The only Faja synthetic crude to reach such level of conversion

ƒ The lightest synthetic crude of the Faja: 32 ° API – 0.2% sulfur
ƒ Main markets: United States, Europe, other possibilities ....
ƒ An already well established product in the market, competing with
Bonny, Brent, Cusiana, LLS

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Comparison of the Faja projects

Project Petrozuata Cerro Negro SINCOR Ameriven Bitor

Partners
PDVSA 49.9% PDVSA 41.67% PDVSA 38% PDVSA 30% PDVSA 100%
ConocoPhillips 50.1% ExxonMobil 41.67% Total 47% ConocoPhillips 40%
Veba 16.66% Statoil 15% ChevronTexaco 30%

Extra-Heavy 120,000 b/d 120,000 b/d 200,000 b/d 200,000 b/d 60,000 b/d
Oil
9.3 ° API 8.5 ° API 8 - 8.5 ° API 8.7 ° API 8 °API
Production
Synthetic
Crude 104,000 b/d 105,000 b/d 180,000 b/d 170,000 b/d
Production 19 - 25 ° API 16 ° API 32 ° API 26 ° API
Capacity

Initial Oct. 1998 Nov. 1999 Dec. 2000 Oct. 2001

Production
Upgrader
Jan. 2001 Aug 2001 Mar 2002 2004
Start-Up

Sincor = Highest added value and conversion rate in Venezuela

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Sincor key figures

Strategic association: Total 47% - PDVSA 38% - Statoil 15%

35-year contract ending in 2037

Assigned area in Zuata zone: 500 km2

Cumulative oil to be produced: 2.5 Gb

Production capacity: 200 kb/d Extra-Heavy Oil 180 kb/d Syncrude

By-products production: 6,000 t/d petcoke, 900 t/d sulfur

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Sincor implementation: a 10-year story

Preliminary studies, Congress approval (1993), conceptual studies,

1992-96
choice of production scheme, definition of exploitation area…

1997 Basic engineering, appraisal program, association agreement

1998 Full field 3D seismic, call for tenders for EPC contracts, financing,
award of EPC contracts

1999 Start up of development drilling (September)

Start up of early production (Dec. 17, 2000): 40 kb/d 8.0 °API

2000
diluted with 25 kb/d Mesa Crude

2002 Start up of Upgrader (March 13, 2002)

2003 April: first stage completion test

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Sincor: largest single investment in Venezuela

ƒ Upgrader: Production of a high quality

Largest single synthetic light sweet crude (32° API)
investment in Jose
Venezuela: 4.2 B$

ƒ Zuataducto 220 km:

Transport of diluted crude
and diluent

ƒ Main Station: ƒ Zuata Field:

EHO treatment and production Cold Production of EHO 8 - 8.5° API
of a diluted crude oil

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Sincor - Main Station

32 clusters - 335 wells (2003)

210 kb/d Extra-Heavy Oil 8.5°API

280 kb/d Diluted Crude Oil 17°API

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Sincor process scheme

ZUATA: Main station JOSE: Upgrader

8.5° API 200 Kb/d 32° API 180 Kb/d

Distillation Hydrotreater

21+200 km

Diluent 70 kb/d
12”-20”

26”-36” LIQUIDS

Diluted crude 270 kb/d ZUATA SWEET

SOLIDS

No steam Coke 6,000 t/d

Coker Hydrocracker
stimulation Sulfur 900 t/d

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Sincor - Upgrader

Cooling water
Naphtha Distillate Steam production
Hydrogen
Hydrotreater Manufacturing unit

Mild Hydrocracker Production Start-Up

13/03/2002

Sulfur complex

Distillation
CDU/VDU
Delayed Coker Unit
Waste Water
Treatment

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Sincor - Solids Terminal

ƒ 2 Mt/y capacity
ƒ ~ 260 M$ investment
ƒ More than 4 million man-
hours of work
ƒ Start up end of August 2002

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First Stage Completion Test: a Success

Completion test above target allows further

significant reduction of parent company guarantees
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Sincor future challenges

Short term:
ƒ Upgrader 2004 turnaround (debottleneck and catalysts change)

Medium-to-long term:
ƒ Upstream
- Reservoir monitoring strategy
- Improve well productivity to reduce future drilling investments
- Stringent control of operating costs in well services

ƒ Upgrader
- Increase operational reliability and availability of the Upgrader
- Align all units for maximum capacity production
- Identify technical bottlenecks for potential capacity debottlenecking

ƒ Marketing
- Improve product quality to further increase sales prices

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Key Indicators

Project investment 4.2 B$

Investments 2003-2037 ~ 3.5 B$

Syncrude valuation Brent + 0.50 $/b

Unit costs
ƒ Technical cost Less than 7 $/b
of which Operating cost 3.2 $/b

Upstream
Order of magnitude: 1 $/b
Challenges: reduce number and cost of workovers

Upgrader
Order of magnitude: 2.2 $/b (not taking into account upgrader shut-downs)
Challenges
ƒ Scheduled turnaround duration and costs
ƒ Control variable costs (catalyst changes, utilities: gas, power, water)

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Sincor future developments

Leverage the success of Sincor

Sincor development should continue and will be phased

ƒ Debottlenecking existing facilities

ƒ Expansions: new areas, additionnal production

ƒ Implementation of new technologies (after successful pilot phases)

ƒ New optimization (integration, adaptation to the market)

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Social Responsibility - Safety - Environment

Great economic impact and benefit for the country

Local employment: more than 30,000 people employed during the Upgrader
construction with a peak of 13,000 early 2001

Exceptional safety record: more than 56 million man-hours without fatality

Social Responsibility: education programs, health investments

Environmental protection: programs for reforestration, control of emissions

and protection of the environment in Anzoategui

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Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

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Yucal Placer

N
C a r i bb e a n Sea

CARACAS
110 km

Altagracia 220 km
390 km

Anaco
Guanare YUCAL PLACER
NORTH & SOUTH
Barinas

100 KM
C C
O OLLOO M
MBB IIAA

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Venezuela gas business context

Status of new gas context in Venezuela

ƒ Gas Hydrocarbons Law (September 23, 1999)
ƒ Gas Licenses process (MEM-ENAGAS/PDVSA, September 2000)
ƒ Selection process (finalized June 29, 2001)

The local gas market:

ƒ Venezuela has the largest gas reserves in Latin America: around 150 Tcf,
of which 90% are associated to oil production
ƒ In the near term, only 30% of the associated gas production will be available for sale
ƒ Gas demand will increase in the mid and long term
- mainly driven by gas-fired power generation (to diversify from hydraulic power which
represents ~ 60% of the 20 GW installed capacity)
- large industrial projects (in particular in Puerto La Cruz area)

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Yucal Placer

A non associated and dry gas reservoir

Discovery in 1946 (firstwell)

Principal reservoirs : Roblecito and La Pascua
Pressure : 3200 psi - 4100 psi
Temperature : 310 °F @ 6200 feet
Depth : between 4000 and 11000 feet
CO2 content : ~ 15%
Number of wells : 35+ on the offered areas
Production up to 1989
Cumulative production : 143 Bcf (with 9 wells)
Maximum production rate: 25 Mcfd from 6 wells

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Yucal Placer Association & Structure

An association: TRIO

58,3 % 30 % 11,5 % 0,1 % 0,1 %

An operating company:

37,33 % 11,67 % 33,67 % 17,33 %

49 % 51 %

Working interest: Total 69.5%, Repsol-YPF 15%, Inepetrol 10.2%, Otepi 5.3%

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Yucal Placer challenges

A technical challenge
ƒ Application of latest 3D seismic and IOR techniques to optimize well
implantation and maximize well productivity in tight reservoirs

A commercial challenge in entering local gas market

A regional development challenge

ƒ Investment and employment for Guárico State
ƒ Relations with local communities
ƒ Protection of the environment

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A phased development

Objective: a commercial phase

ƒ Targeting 300 Mcfd in first commercial phase
ƒ And potentially more... in further steps

To mitigate uncertainties: an Early Production Scheme (EPS)

ƒ To evaluate the field potential for future developments
- Reserves: quantity & quality
- Productivity of wells
ƒ Start up in early 2004

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A phased development

2007 - 2035
2001 - 2007
Phase 300 Mcfd
With gas sweetening
Phase 100 Mcfd
Surface Facilities
Surface facilities +
+ Compression
7 wells (2 clusters)
+ 33 productive wells
Start up (beg. 2004)
(7clusters)
+ 2 inj. CO2 +1 inj. water

PHASE EPS 100 PHASE 300

(“Early Production Scheme”) (subject to EPS results)

Delineation Strategy
Seismic 3D HR 330km2 Delineation Strategy
+ targeting deep horizons Seismic 3D HR 650km2
+ 2 exploration wells

Investment: 130 M$
Investment: 470 M$

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Planning

Execution Planning per phases

Phase EPS 2002 2003 2004 2005 2006 2007

Permitting
Seismic 3D
Drilling
Engineering & Construction
Start up (e)

Phase 300* 2002 2003 2004 2005 2006 2007

Preliminary Studies
Drilling
Engineering & Construction
Start up (e)

* subject to EPS results

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EPS Project
to Caracas
New well
2 x 26” NPA, Exixting line
connection in LANA
36 & Nurgas 30
IPARE
Compression
Future compression plant

1 x 30” 2 x 26”+30”+36”
12’’, 24.5 km
to Barquisimeto
From
LEZAMA Anaco
CENTRAL PROCESSING
FACILITIES
3D Seismic: 330 km2
José Tadeo Monagas
Drilling: 7 wells LÍne S1 – Cluster N1:
CPF, 4 wells
10”, 16.5 km
Gas pipeline: 42 km

Gas processing facilities: Cluster S1

3 wells
100 Mcfd

LIBERTAD DE ORITUCO

Area Total YP: 1811 Km2

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Yucal Placer operations

Drilling

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Yucal Placer operations

Construction side: lines and surface facilities

Planned start up early 2004 : Production of first gas 29 months after licence signing

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Social investment & sustainable development

Important challenge for social environment

Respect for the natural environment and local culture

ƒ Social, economic and institutional base line
ƒ Identify the key players
ƒ Establish relationships based an mutual confidence
ƒ Build alliances with communities, NGO, authorities

Participation in economic and social development

ƒ Participation & Development vs Assistance
ƒ Dialogue, information, listening and discussions
ƒ Promote multi-annual long term program of actions
ƒ Aid in creating jobs not directly related to our activities
ƒ Build alliances and develop a dialogue system to define projects in order to take
actions in a sustainable manner

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Agenda

The Venezuelan business context

Jusepin

Sincor

Yucal Placer

Business development perspectives

42 Venezuela Field Trip - 3C311

PDVSA Business Plan Opportunities

Investment budget with the private sector 2003-2008

Direct or in association with PDVSA:

25 B$

B$

3
5
7 11
6
4

CONVENIOS
OPERATIVOS
FAJA DEL ORINOCO

REFINACION &
SUMINISTRO
GAS NATURAL

QUIMICOS Y OTROS

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New opportunities: going forward

Total benefits from a privileged position...

ƒ A long presence in Venezuela: since 1988...
ƒ With in-depth knowledge of the various areas
ƒ A long-standing relationship with PDVSA and MEM
ƒ A track record of successful projects in Venezuela ...

Total will study all new opportunities

ƒ Selecting the most attractive ones...
ƒ With an adapted legal framework,
- Satisfying MEM and CVP requirements
- Guaranteering security of investment

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