Patrick Pouyanné - Total SA Patrick de la Chevardière - Total SA Arnaud Breuillac - Total SA Philippe Sauquet - Total SA Momar Saliou Nguer - Total SA Namita Shah - Total SA Bernard Pinatel - Total SA.

Theepan Jothilingam - Exane Ltd. Oswald Clint - Sanford C. Bernstein Ltd. Thomas Adolff - Credit Suisse Securities (Europe) Ltd. Bertrand Hodée - Kepler Cheuvreux SA Irene Himona - Société Générale SA (UK) Iain Reid - Macquarie Capital (Europe) Ltd. Brendan Warn - BMO Capital Markets Ltd. Jon Rigby - UBS Ltd. Martijn P. Rats - Morgan Stanley & Co.

International Plc Lydia R. Rainforth - Barclays Capital Securities Ltd. Robert Alexander Aldrich West - Redburn (Europe) Ltd. Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP Lucas Oliver Herrmann - Deutsche Bank AG Jean-Pierre Dmirdjian - Raymond James Euro Equities SAS Kim Anne-Laure Fustier - HSBC Bank Plc.

in China, 40%; in India, which is a new country to LNG – this year we saw all demand for LNG; in the Middle East, 90%. So, that proves that in the gas, like in oils when you have lower prices, you accelerate the demand. It's a good lesson.

And another end of it is that you can see on the map the number of projects of floating storage regasification units which are studied around the world. Today, you have 70 million tons of floating regas capacities being already installed in the world. And there is more than almost 200 million tons being studied.

Why? Because there have been some improvement in technologies and the cost of a floating storage regasification unit is much lower than before and give potential access to LNG to more countries. This is a good message for gas, by the way, and it's not only on FSRU, but we need to work on cost.

Also in the LNG plants, we will target to be able to come back to a $500 per ton of LNG production. It would be good if we want to continue to develop the gas market. So, the gas market is facing, on one side, quite stronger new supply. But it's also – this has an influence on the price. But it also helps the demand to come back.

So, result of all of that is that the price today, during this winter period, are quite good, including in Southeast Asia. So, there is also strong volatility there and that's why we need to continue to work on the cost. That's all for my introduction, but I will save the global elements.

And now, I will leave the floor to Patrick, who will explain you and present you the results of 2016 and the objective of 2017 before I will come back..

Good afternoon. Sorry. All the connections are (12:48). The mood is obviously much more positive today than it was a year ago. We are, in fact, facing a very volatile environment. And keep in mind that, actually, 2016 was pretty challenging. Total quarterly result improved steadily all over the year, quarter after quarter.

We posted an $8.3 billion adjusted net income. It was a tough year for the Exploration & Production. And nevertheless, Total was the most profitable E&P among the major, basically, thanks to production growth and efficiency gains. As I mentioned to you, our Upstream was profitable every quarter despite the harsh environment.

Of course, and you see that on the left side of the slide, the backbone of the group resilience was the Downstream. Downstream results are about two-third of the group adjusted net income, despite also a sharp drop in European Refining margin.

We also point out on this graph the pro forma contribution of the Gas, Renewable, and Power segment, new segment that is taking place in the group. If it was there in 2016, it would have produced $400 million of net profit. For the year, Brent average $44 per barrel, a decrease of 17% in comparison to 2015.

NBP, the gas price in Europe was only $4.7 per million btu, a drop of 27%. And the European Refining margin indicator was $34 per ton, down by 30%. So, as you see, do not forget that 2016 was a difficult year in term of environment.

On the right side, if you compare Total performance to our peers, honestly, for the past two years, we outperformed our peers and we repeated in 2016. The Y axis is production. The X axis is adjusted net income. The size of the bubble is the size of the net income. Of course, you see us on the top of the chart. The Downstream is delivering good result.

This is part of the explanation. Another part of the explanation is that we continue to increase production, 4.5% this year, which is a great achievement after 9% the year before. And structurally, we are improving Upstream forecast production.

So, all in all, a very good year and a very favorable comparison of Total performance in comparison to its peers. Moving to the costs, you know that Total started to cut costs and to restructure its Downstream ahead of the other. Now, cost reductions played a major role in producing our best-in-class result.

Compared to our 2014 base, the sustainable cost for 2016 was $2.8 billion. We expect $3.5 billion for this year 2017 and we have a target of $4 billion for 2018. Upstream represent two-third of both figures. This is also because the Downstream restructuring to place before and started before 2014, which is a baseline for those figures.

On the right, you see the positive effect on our OpEx per barrel, where we are currently at $5.9 per boe. For 2017, we target $5.5 per boe. We have the lowest operating cost among the major. Basically, this was said by Patrick, but we are changing the company culture and concentrating us on controllable cost. And this is working.

For 2017, we are ramping up the new Total Global Services unit that will allow for the centralized purchasing of the fourth operating segment at the end of quarter. And you see that on your screens, the world is much nicer with an oil price about $50 per barrel.

But we are still committed to reduce costs, to reduce breakeven in order to increase our available cash flow. Moving to CapEx and investment, for 2016, our CapEx was $18.3 billion. This include $800 million of resources renewal that we acquired basically to Barnett. For 2017, we gave a guidance of $16 billion to $17 billion.

This include $2 billion of asset renewal acquisition. So, organic CapEx should be $14 billion to $15 billion plus the $2 billion of acquisition of new resources. And then we gave another guidance for the period 2018 and after of $15 million to $17 million, also including the $2 billion asset renewable. Sorry.

These figures include $3 billion to $4 billion a year for Downstream and the new Gas, Renewable, and Power segment. Basically, we are doing more for less at the moment. Of course, this is due to the deflation that we are able to harvest. But this is also due to our own effort to reduce our own cost.

On the right, you have two example showing how we optimize execution and design. One is Maharajah in Brunei. The other one is Zinia 2; and you know Zinia 2 where we cut cost by half. Basically, my comment is outside of the onshore U.S. market where drilling activity has recently increased.

There is far more capacity in the service sector than there are project. So, we believe that there is a window today of an opportunity to look in low-cost project. Since 2014, service cost has deflated by 30%. This is an average. On certain area like deep-offshore drilling, the deflation is much higher, sometimes 50%.

So, we currently believe that in our market, it is a bigger market, and we want to take advantage of it. Moving to production, you remember in 2015, we announced a 9% production increase, and Total continued to execute and deliver an unmatched production growth with, in 2016, plus 4.5%. And we expect to grow in 2017 above 4% again.

On the right, you see the mix of new venture in dark blue, ramp-ups, and start-ups. You see that for 2017, most of our growth is coming not only from new venture but also from ramp-up or start-up already done in 2015 and 2016.

The contribution of the start-up of 2017, the top light blue on the 2017 bar, is limited because most of our project – Tempa Rossa, Ichthys, Yamal – will start end of the year and as we are present, we do not take into account any contribution of those fields in our 2017 production.

We confirm our target of 5% average production growth for the period 2014-2020. And the takeaway message here is that we are derisking the medium-term production as I showed you with the ramp-up of the existed start-ups. And our portfolio is rich with giant long plateaus projects that are nearly complete or close to coming on-stream.

Reserve replacement, secure production growth is well supported by our expanded reserve base. We added 1.2 billion barrel equivalent of proved reserve in 2016 giving us a reserve replacement rate of 136% using a constant Brent price. We have more than 12 years of proved reserves and more than 20 years of proved and probable reserves.

You know the SEC rules for reporting reserve. The current SEC rules require that we use the average oil price for the year based on the first day of each month. This average for 2016 give $42.82 per barrel. This is not the average number you have in mind, the $44 per barrel, but that's as far as SEC rules.

Using this $42.82 per barrel, we add and we have to debook Surmont because the NPV of Surmont at $42.8 per barrel is negative. Actually, it's positive above $45 per barrel. So, if we were using the same methodology, with the SEC number using current oil price, we should rebook again Surmont positively. So, this is a result of the SEC rules.

We are more focused on the reserve replacement rate that controls price which is something you are much able to appreciate the value, and we increased our reserve by 130%. Exploration, you remember that in the past we faced difficulties in our exploration.

We are turning north to exploration with a new leadership team which is starting to deliver promising result. You have our main successes in red star on this map and basically, we added 500 million barrel of resources in 2016. And on top of that, and you have a look on the top left of the map, we are doing more for less.

In 2016, we spend $1.4 billion, drill 19 wells. For 2017, due to a deflation and our own ability to reduce cost with $1.25 billion budget, we will drill 27 wells. Obviously, for 2017, we are extremely happy with the positive result on North Platte in the U.S. on the left, with Libra in Brazil, with Owowo in Nigeria.

And over there, there are also some giant prospect in the Vaca Muerta and offshore Myanmar and onshore PNG. Exploration, as you know, is vital for the long-term sustainability of the E&P because it brings prospect of organic growth. Basically, our CapEx figures, $16 billion, $17 billion I gave you, includes around $3 billion of resource renewal.

Roughly $1 billion of CapEx for exploration. Among the $1.4 billion in 2016, there were $1 billion, $400 million of OpEx. And $2 billion of acquisition of resources discovered by others. So, this slide was a big debate between Patrick and myself to know who will show to you. On the top – on the bottom left, the robot on Mars.

We are growing a profitable low carbon business and we are continuing and growing our R&D budget for the cycle. On the left, you have the Gas, Renewable, and Power positive contribution. A few figures for this new segment in the company, $500 million of cash flow from operation.

More than 9% for ROACE and a little bit less than $5 billion of capital employed. And Total is one of the largest global gas and LNG player. And this robot you see on Mars is powered with SunPower solar panel and Saft battery. And as some people told me, the market on Mars is small but we have a big share of it.

R&D is very important and we haven't reduced our R&D efforts during this downturn of the cycle. And R&D is also key in our ongoing cost reduction. As you see, we increased the R&D cost. On the right side, this is excluding Hutchinson, Saft, and SunPower. So, this is purely the oil and gas business, and we increased our R&D budget by 5%.

Turning to the Downstream, obviously, the Downstream is extremely resilient. It provide steadily $7 billion of cash flow from operation. We do maintain a $7 billion contribution at $35 per ton Refining margin for 2017. The ROACE of our Downstream operation compare extremely favorably to our peers with a number of 34%.

Basically, I can tell you we are establishing tacticals on our Downstream operation, and we feel confident that we can provide a sustainable cash flow contribution of about $7 billion per year. Asset sale program, I know that some of you were skeptical about our ability to deliver $10 billion asset sale program for the period 2015-2017.

For the 1st of January, we closed Atotech for $3.2 billion. We have already complete 80% of our program, still about $2 billion to be closed. We are confident that we will achieve the $5 billion target for 2017, which includes the Atotech sale, which is already in our book.

Honestly, when you correctly select your asset or your buyers, we are able to sell our asset at very reasonable price at, for Atotech, 12 times the EBITDA, which is extremely favorable for the seller. The balance sheet, financial strength and flexibility are buoyed on a strong balance sheet. We have managed to keep our gearing around 30%.

End of 2016, the gearing was 27%. Our guidance is that we are moving over the long term towards a gearing of 20%. As Patrick told you, volatility is here to stay. This is our thinking. And reducing the breakeven is the most effective strategy to prepare for volatility. And I would say that a lower gearing is also a key objective for the same reason.

Total was the most profitable of the super major with a return on equity of 9%. We are far from our all-time record in 2008, 2009 but posting an ROE of 9% with the bind of 44%. It is really an achievement and we are the best in class on these metrics. Following our review of the gas prices over the world, I told you the NBP was down by 27%.

We have reviewed the value of some of our gas assets in the Upstream division Laggan-Tormore, Angola LNG, GLNG in Australia, and we impaired $2.8 billion in 2016, basically because of the lower gas price assumptions we were using.

And my last slide, we use the same slide last year to show you that what we promised you, what target we were giving to you last year were basically realized. We give you a $19 billion CapEx target including asset renewal, we realized $18.3 billion. The cost reduction, we went from $2.4 billion target to $2.8 billion realization.

Upstream OpEx, down to $5.9 per boe. Production growth evolved to 4% target. Cash flow from operation for the Downstream, close to $7 billion. Asset sale, done.

Resource addition, we have been able to add 1.7 billion barrel of oil equivalent, below $1.5 per boe, which is very much in line to our initial target which was only 1.2 billion barrels of oil equivalent, below $3 per boe. So, we, once again, do more and use less of our capital. Thank you. With that, next for Patrick again..

so first one is because we have an assumption of $35 per tonne on the refining instead of $25 per tonne which represent more or less $500 million to $600 million as I told you. We have a second source, is that we have savings of around $500 million, additional savings. So we continue to lower the breakeven, $3.5 billion instead of $3 billion.

And the last source is that we have some improved fiscal terms like the one we will benefit on ATCO (1:04:04) which are offering quite an interesting return in terms of cash to us. So we will be in this situation of $50 per barrel. And on the top of it, as you can mention because of the growth we have an additional $1 billion coming from the growth.

This situation of course makes the Board of Directors of Total quite comfortable. We have a strong balance sheet, so gearing is at 27% and are our expectations.

We are turning the corner in terms of cash flow breakeven, and this is the reason why we have taken some decisions in terms of shareholder returns which, of course, are the core of our thinkings. We, on our side, we want to preserve the financial flexibility of the company because we, as I told you.

we consider, and Patrick reminded you but volatility is still in the market, and it will be a mistake to believe that the trees grow to sky; it doesn't work like that.

So this is important which means that, yes, we give a priority to lowering of gearing even if the medium-term objective as 20%, and we consider from this point of view but the scrip dividend is offering some flexibility even if it's a 0% scrip dividend.

A 0% scrip dividend, the take up will be less than 20%, but for, as you know, to implement such scrip dividend you need to go to a general assembly of shareholders, so it's a yearly event. And we prefer to keep a 0% scrip dividend than eliminating the scrip dividend at this stage because of the volatility of the oil markets (1:05:32).

But at the same time, as we told you, we are ready to eliminate the discounts but with a Brent at $60 per barrel, so a 0% discount.

We have made the first step in December by reducing the discount to 5%, and we are committed, and the board of directors is committed, to eliminate the discount at $60 per barrel because, in fact, the breakeven should take a 0% discount on the scrip dividend, a take up of less than 20%; the breakeven is around $60 per barrel.

So we are just continuing to monitor the cash flow of the company, so the reason is just there. It could come soon; we'll see. And at the same time we consider there was no contradiction between maintaining a zero percent scrip-dividend and beginning to think to increasing the shareholder return.

We selected the tool of increasing the dividend; it's a small increase, 1.6% on the quarterly – the last quarter dividend, €0.62 per share, but it is the strong willingness of the board of directors to demonstrate.

But, yes, we are very confident in the strength of the balance sheet, and we are even more confident in the capacity of the company to increase its cash flows for the future as I demonstrated to you, and to have an increasing leverage to oil. Of course the commitment is not only for the last quarter of the year; it's for the coming quarters.

So you will not see, as you've never seen in Total, a decrease of the dividend hence was the €0.62, but it's why I can't speak about 1.6%.

And again we believe that it is a combination of maintaining the financial flexibility with a 0% scrip dividend, but also beginning to return to increase the return to shareholders because we have higher cash flows. So as a conclusion, I just would like to summarize the three messages we delivered to you today.

The first one is that we are fully committed to maintain the strong discipline that we have demonstrated during the last two years. Our program on OpEx saving is in place, will be executed as we have executed it, and we have done better than we anticipated. We gave you a CapEx guidelines in September of $15 billion to $17 billion.

We are in the guidelines. And all the program that I mentioned to you about new sanctions, adding new resources, will be developed within the $15 billion, $17 billion guideline. We have room to do that and we – because, again, as Patrick told you right here, we can do more with less in this market.

And second message, we have a near-term accretive growth and an increasing leverage to oil. We have been able to deliver this growth. The projects are there, we are progressing steadily 2017-2018. We still have 12 major projects to come, and we'll deliver – we'll feed that growth and this leverage to oil.

And the last one, yes, we are entering in a period where we are strong enough to use our financial flexibility but within the discipline I mentioned to you in order to take advantage of this impairment by sanctioning new project, low-cost projects, and adding low-cost resources on which we will be able to deliver more value to our shareholders.

Thank you. And so I will invite the whole executive committee to join me around the table to answer all your question. (1:09:31-1:10:02).

Hi. It's Theepan from Exane BNP. I had a – just a question on projects. Firstly, if you could just flesh out to the market. You talked about the financial flexibility of Total, and very much confirming that $15 billion to $17 billion on a medium-term.

Perhaps you could give us a little bit of color on where or how the project spend on the existing asset base is sort of falling to give you that flexibility in the next couple of years? And then, secondly, I think you have a very differentiated metric, perhaps, versus your peers in terms of looking for sanctioned projects.

I think you mentioned the 10 projects, seven of which Total operated.

So I wanted to understand again perhaps or get reassurances in terms of how you can execute in terms of delivering your most-efficient projects since the organization have the capacity to really develop 10 projects successfully over the next three to five years or will we see some of the same mistakes we've seen previously? Thank you..

Okay. The first question is around – the answer is 50%. In fact, when we gave you the guidelines in September of $15 billion to $17 billion of CapEx for the next four years, 2017 to 2020, the existing developments, which are being developed, we are presenting around 50% of this amount.

So we have room, that's why I can confirm you today, but we stick in this guidelines. We have room to launch new projects and we can add new resources in this portfolio. So this is the first point. Can we add – so I will give the floor to Arnaud to answer you that questions. Again, just so before – to give him time to think – I have two remark.

First, you remember that in terms of human resources, we did not make any lay-off. We decided deliberately to work with less people but not to make lay-off in the company.

Yes, some contracted people are gone but we have kept the core of the company intact, and we've done deliberately because we want them to work on costs, strangely, and we wanted also – we were sure that one day we'll need them. So it's time to have them in the company and we will use them.

So, second question – remark is that all the 10 are now big projects. We have five big and five small, but Arnaud will probably complement that answer..

Just to complement quickly. It's clear that as you know we are starting our projects year-on-year and delivering them on plan. And so we are demobilizing our operated projects, and so we are actually getting off teams and ready to engage in new projects.

I can share with you that in the last couple of years, we have questions internally in Total about what are going to be our next projects. Now they know where the next projects are coming from.

I think there is another aspect to it, it's what happening in the industry because, as you all know, there was clearly an overweighting situation in the industry, which actually had impacted also a lot of the supply chain, and as we've mentioned before, today, it's clear that the supply chain today are contractors, engineering companies, are short of work.

So there will be capacity there and this – clearly, all of them are trying to retain the best of their people, so we believe the capacity today to engage in new projects is better than it was three, four years ago..

Yeah. I would say that on the top, some of the big projects which were already being developed have stopped or are now ending, so we'll use the part of the staff which we develop – sorry. Now just to mention about, when you'll see the list amongst the giant ones, we have three operated and two non-operated, so the burden is less.

It is not five operated even if you were right to remind. But 7 out of 10 are under our control..

Next question on the front..

Thanks. Thank you. Oswald Clint of Bernstein. Could I ask a question about the LNG? You talked about adding 2.5 million tonnes of new demand, yourselves creating demand. Could you talk about that number? Is that something we could see repeatable each and every year? Do you see scope to create that type of magnitude for Total (1:14:54).

And also do you think you could extend further down the gas value chain in countries? I know you talked about Brazil, but what about China, India, and become the customer yourselves in some of these countries from the LNG side? The second question, Patrick, you mentioned getting into Brazil.

You promised or pitched the idea of technology to lower the costs of the pre-sold oil to Petrobras, and that maybe helped you access that asset. What exactly are you talking about there? What type of reduction in cost is possible? Thank you..

Okay. First, the 2.5 million tonnes for Philippe. Explain where they are, especially in Brazil and Ivory Coast in Pakistan..

Yes. Well first, welcome, and we ended 2016 – managed to contract around 2 million tonnes of additional LNG demand for ourselves. And for 2017 we are working, as Patrick mentioned, on several projects, at least three of them. Ivory Coast should turn up if it materializes by 1 million tonne per year of LNG demand for Total share.

Pakistan should be closer to the same and Brazil should add a bit less than 0.5 million tonne for the short medium-term; over the long-term it might much more.

So you see that only this project, and I can tell you that we are working on many others, we have the potential today within Total of generating this 2.5 million tonnes of additional demand each year. So we are – we feel safe, and as you've seen the real strength of the market that was shown almost everywhere including in China and India.

It is giving us confidence that these countries will also contribute highly to additional demand for the whole market, but including for Total in the medium-term..

Yeah. In terms of can we repeat it? Yes, we have (1:17:26) and which we were – we believe that in LNG, with the market today which is more I would say a buyer market than a seller market, if we want to create the demand, we need to be more integrated.

When you go downstream the chain, regas terminal is not a big investment when you think about it, you can't even have some financing on it. It's more complex whereas if you go downstream the chain, we take shares in power plants or things like that. We have accepted to do that in Brazil, but it's part of a larger package.

It's not a strategy per se, but if we need to do it in order to have a leverage on the demand, yes, we can do it. India, obviously when you think to India, because you know like in Pakistan you can say there is a buyer but you have to find the right people who will pay the gas at the end. So it's also a way to secure somewhere the payments of the gas.

On the other point on Brazil, I think Libra is a good example.

In Libra, we are working out together with Brazil – with Petrobras, sorry, and I think we are targeting 30%, 35%?.

Yeah..

35% lowered cost than we had one year ago. So the teams are working together, and they have many ideas.

I mean, maybe you can describe some of them, Arnaud?.

Yeah. One of the key characteristics of Libra is the productivity of the well. The expansion well stood at 50,000 barrel per day each well. So you have a very consultative structure. We sell about $3 billion to $4 billion a barrel, and this is the same treat (1:18:57).

So if you compare this to our Block 17 in Angola, we will be able to have the same FPSO, repeat it several times. We are thinking at up to four FPSO on the Block. So this standardization will give us some advantage. Still we're also trying to capture the market situation that we can see, and particularly on drilling.

And we are also working, and this is part of the strategic cooperation with Petrobras, on some innovation with regard to the compactification of units trying to get more condensed and compact design for the FPSO..

But to tell you, it works well because I visited myself Santos in Brazil, in Rio. Pedro Parente is coming to Paris to post soon. And Arnaud and (1:19:51) are working together in managing a number of topics that we want to work together. So it's part of the alliance we have done, the technology is also there.

And, in fact, both companies from a business point of view, when you look to deepwater, Petrobras was one of – probably the ancestor of deepwater, and Total came just after. So we have some common points there to work together.

Another question?.

Afternoon. Thomas Adolff from Credit Suisse. I have two questions. Firstly, I want to start with just capital allocation or specifically the priorities around the excess cash, whenever you get to the excess cash. You have a framework in place, but often decisions can be taken in a more dynamic manner.

And as far as resource replenishment is concerned, you've taken a conscious decision to go for the inorganic approach or the bolt-ons.

But whenever we get to the excess cash and the priorities around the excess cash, the questions I had is should I think about you're going to do more deals to high grade the portfolio? Should I think about a removal of the scrip dividend if that's still part of the plan? Should I think about share buybacks if you get the gearing down to 20%? Or should I be thinking about setting your euro dividend at a level to keep the dollar payout unchanged? That's the first question.

And I have a follow-up..

Okay. Maybe will have the right to ask the question. I think we say, actually, the – in terms of – if we have excess cash flow standing, we don't have much excess cash, to be honest, $55 compared to – and since we don't – we gave you, we don't have much. But gearing is clearly our first objective. We want to deleverage the company.

We want, clearly, Patrick told you, and it's the first objective. We never said that we will remove the scrip dividend. We say that we will end the discounted scrip dividend; we confirmed it today.

And again, it's mainly back, the take up will be less than 20%, so it's not far from a full dividend but we want to keep the flexibility in case of a volatility. And we won't end them. If we have more than that, we can see we will buy back shares. But for the time being, I don't have that cash. So it's beyond it, it's beyond at this point.

Patrick, want maybe to continue to complement my answer?.

No. It's a question for rich people..

Maybe we are richer in the industry, but we are not so rich today..

No, but we'll be glad you asking this question again in three years' time when we have plenty of cash available on us. But this is not the case today..

But remember, I believe that the best strategy is to maintain a sustainable level of CapEx and investments. So you will not see me – I told you last time, and I told the board of directors, if you see me asking for more than I would say $19 billion of CapEx, stop me. It's a mistake. So return it to the shareholders. It's better..

The second question I had is, last year in September, you showed a chart that by 2020, based on your demand and supply forecast, that there will be a big deficit. I'm not sure whether that's still your base case.

But let's imagine a world that is slightly different, that OPEC can produce more, maybe Libya and Nigeria will divide Iran, Saudi Arabia will pump more, Russia can certainly produce more, the U.S. shale can potentially produce a lot more, and Brazil will also contribute.

Now when I look at your portfolio, you do have decent exposure to the Middle East. On my numbers, the cash margin is a little lower. Brazil is great. You went into Brazil. Russia you're not there apart from LNG, the margins are fairly attractive. And U.S. shale, U.S.

shale can surprise significantly on the upside, and you don't really have exposure to that.

So I wonder in the wells where that deficit don't exist, so that shale is a much better swing producer at much lower cost, how should I think about Total's hedge against that? How should I think about the big resource base that Total has in its portfolio? And how should I think about how much of it you would work say at a $50 oil price? Thank you..

This idea of shale oil being the best asset because it is a flexible investment, it's on and off like this, it might be correct but as far as I see, even in the U.S. – well it was extremely successful, most of the small E&P companies are facing trouble.

There are some very good guys, I won't give you names but you know them, but this industry is facing trouble. So it is not so easy to make money on this matter. I would remind you also that we do have very large resources in the Vaca Muerta. I know that this is in Argentina, that Argentina is not in the U.S.

It might be more difficult; there is a political risk attached. You don't have the same economy of industry available in Argentina.

But it is important, and we are currently developing pilots in Argentina and our capability to produce, and we are reorganizing our self within the industry to cope with such a development, and one can imagine such a development with this report of the World Bank for instance in order to mitigate the political risk..

Okay. Very clear. The U.S. shale is too expensive for me; I will be very straight. I studied – we spent, both of us, a lot of, with Patrick, a lot of files. I don't want to buy assets at $80 per barrel or more.

I feel we have more opportunities to add value to investors by doing a deal like the one we've done in Brazil, and we have override this, that spending and buying assets were to justify it. And I've studied all of them even $80 per barrel.

So maybe I'm wrong but at the top of it, I repeat, I will be a financial investor; I don't have human resources; so what is best for my company? Is it to be a financial investor or is it to use our industry, our capacities and our people in order to leverage and allow the company and to create value? So, again, this is the situation today, and we work on it.

I'm not fully convinced that at $50 per barrel is the best edge for the company..

We have a question at the same table..

Bertrand Hodée, Kepler Cheuvreux. One question if I may. Coming back on slide 21 where there is a list of the 10 FID over the next 18 months.

Where do you see a risk on those FID as political or as I would say in terms of cost? What are the project where you are extremely confident that the costs are already right? What are the project where you think you still have some work to do in terms of cost? And also, finally, can you elaborate more on the Vaca Muerta opportunity? Is it gas? Is it liquid? And also are the costs right or the fiscal terms right there? Thank you..

Okay. The main risk of course is South Pars in Iran. If I don't answer you that, you would be surprised. To be clear on South Pars, the timetable is quite clear to me. The U.S. President and the U.S.

Secretary of State will have to sign some waivers, renew the waivers by April and May if – in order to stay within the scope of the treaty with Iran, either they do it or they don't do it. Our own timetable is to finalize the contracts and to take the FID by middle of the year. So it's doing well from our point of view. We'll have the answer.

So either U.S. continue or we don't continue. If they continue, we can – we will move on because, again, we have all the economic terms and the contract is very good. We want to sanction the project. If the U.S. decide not to stick on the treaty then we'll have to obey to the international laws. That's clear to me.

For the others, Libra, one, I will say that you know that there is an issue about local content. The Brazilian authorities that we have met several times, myself, Arnaud with the minister told you that we will have a positive answer, a good surprise, a nice surprise in the coming two months. So I'm trusting them.

But again as soon as we have this local content regulation being lifted, it will move quickly because we have – all the partners are dedicated to that. Lake Albert, it's the north end. Bonga South West is operated by one of our peer, but it's working hard on the modified project. We've announcing very good – very competitive costs.

The satellite projects are all in our hand. And a word about Vaca Muerta, Vaca Muerta, we have developed – we have, in fact, quite right, Patrick told you, a huge domain. There is a limitation with the difference which is linked to the history of economic governance in Argentina.

We have to face the reality but we have a gas domain which is very easy to develop for us, and we have a first development tranche that we have released a sanction of more than $500 million because we have already the surface treatment capacities. They are there because it was all conventional domain.

Conventional position has declined and so we have available capacity. So it's a matter of drilling and connecting. So this is quite profitable.

We are waiting – the Argentinean government has announced what they call, I don't know, a gas plan with quite good prices, around $7 per million btus, and we told them if you confirm that by writing, but we want the paper. We are – in Argentina, sometimes you need to see the papers. We have been paid for that. We will launch the project.

And then we have another area which is more with liquids which we'll just appraise positively. But this one, we need to build the facilities, and probably this is what Patrick was suggesting together with other operators in order to be smart.

So this is a matter for me of at which pace do will be developed there, Argentina, but the first tranche is ready. We sanctioned it internally, subject to having the papers..

I think Irene has a question over there..

Thank you. So Irene Himona, Société Générale. The downstream is continuing to pay all of your cash dividend costs. So I had two downstream questions, if I may. Firstly, in Marketing & Services, not new managers but conventional Marketing & Services, you mentioned it's a non-cyclical business, it's very stable, et cetera.

But surely if you're growing your volumes 4% a year as you did last year, and you're growing into high-margin businesses like lubes, surely the outlook for that business is improving rather than stable profitability. So I was wondering if you can give us some guidance on the outlook. My second question is on Hutchinson, especially again proceeds.

Clearly non-core, it's a sizable business. I wonder if you can share your thoughts about the potential for Hutchinson to free up some capital for you to use in your core business..

Momar, you'll take the first question about M&S, and going the M&S and the reserve and the cash flow..

Yes, you're right. We've delivered on the growth of 4%. We've had good results in Europe, I mean, that's our base. We've had good results, good margins. We've had good results in Africa.

There's probably the on lubricants, the marine lubricants have been quite difficult here because of the freight – the situation of the freight market where we've had pressure on prices, stiff competition. But otherwise we are delivering. And the 4% – and we are fairly confident that in the coming years, we will deliver on margins and on volumes..

On Hutchinson, I will repeat what I mentioned already. It's a sizable asset. There is, in each and some, some capacities which could be advantageous for us in terms of manufacturing if we want to develop other businesses like our battery business. So we see some synergies from manufacturing our oil somewhere. I think that you are right, Irene.

It's not core, but I'm not sure but Saft is core as well from this point view. If you go to oil and gas, oil and gas is clear but frankly with the balance sheet we showed you, we don't need to sell Hutchinson. I don't want to sell Hutchinson; there is no reason to sell it.

And I prefer to keep these type of assets if we face a downturn, once I we'll be happy to trade. So it's a big asset. It's not easy to sell. It's much bigger in terms of value than Atotech, and we managed to sell Atotech at a very high price, but the bigger it is, the more complex it is also to monetize these type of assets.

And so, frankly, it's not on the agenda at all you've seen. With the $10 billion we have executed them, like Patrick told you, with 80%. We have few assets that we will announce soon that we will – is down.

And we don't need, in terms of financial strength of the company and balance sheet, to sell more assets for the years after with the breakeven we have done. So Hutchinson will remain in Total even if it's not core unless we have some other big plans..

Okay. A couple of questions at this side. Iain first..

Yeah. Hi. It's Iain Reid from Macquarie. Just a couple of questions on some of the projects you mentioned. The write down you took on Surmont was interesting me because Surmont is, well it seems to me is a quite good asset. And Fort Hills, which is the poorer asset, you don't seem to take a write down on.

So I'm just curious as to what the kind of cost or, in fact, breakeven oil price situation is on Fort Hill? So I know you are attempting to get out of that, if you can. Also on the Elk-Antelope, that used to be one of the projects in your calendar about to be FID'ed or certainly in the next 12 months or so, then it seems to dropped off there.

I just wonder what you're seeing there now which has kind of pushed that one down the pecking order a little bit. And the last is on your oil price sensitivity. You've made some changes to the PSCs or you negotiated some changes to PSCs in Angola, et cetera.

I just wonder whether that has enhanced the oil price sensitivity of those projects or has dampened it as oil prices move up?.

Okay. So first the reserve write down. There are rules; the rules are the rules. It's a difficult exercise, by the way, because you have to understand what we have to do in the company.

We have to imagine a world which will stay forever at $42.8 per barrel, and that means that, for example, we have to decide which level of OpEx we will take at $42.8 per barrel if the world was permanently at that level, so we take assumptions. Of course, there is some – it's not a view of OpEx; we have to project that from 20 years.

So on Surmont, we work – and we did not work alone, by the way, we have a partner there as well, as you know, an operator – so we exchange data, and we took some assumptions about growing the OpEx but we considered that it was more reasonable to write down the Surmont 1P reserve being down, to be clear. They will come back next year.

So next year we'll have the 300 million barrels will come back unless we have again at an average of $45, less than $45, so it did not disappear. The proven reserves are developed, they are even produced but the SEC has some rules, and we are observing the rules, and we have decided with the operator. We'd welcome that.

On Fort Hills, we worked also on the operator. There is difference between both projects, is that on one side you need to pay for the gas, if you remember; on the other side the OpEx per barrel is more I would say is less expensive.

So we have the NPV zero for Fort Hills would have – if we had been under $40 per barrel more or less, we would have add it to the books. So there was a difference when we took that. In terms of margins per barrel for the future, we'll see what will be best. So, again, it's a little theoretical exercise, and we work with both operators on both assets.

We took some assumptions, but was a reserve value calculation. We have done it honestly, and we are ready to answer two more questions. Elk-Antelope, by the way, it's a good – I will – why is it not because we saved the list of 18 months FID, so, maybe 24.

By the way, you know the situation is a little more complex there because for the time being we have a partner which is supposed to be bought by somebody else; it's not done, so we are a little obliged to wait. Even if we work, a remark that I want to do is – but some people were wondering why we were giving up on Elk-Antelope.

One of the reasons why that in our portfolio we are thinking on the start that time also to Brazil already. And so the decision we have to take internally was do we continue to have a bid on Elk-Antelope or do we prefer to put the money on the Brazilian deal? And the decision was also this one. So it's part of the discipline that we had internally.

We stopped, but again we have met with a potential buyer together with the previous CEO and the new CEO, and we all agree that we'll find a way to be smart together and to make the most efficient project but we need to have them around the table. So maybe 24 months, and not 18 months but we'll work on it, its part.

We did not mention the whole list, I could've added that of course, I would say the discovery in the Gulf of Mexico, North Platte, is part of the projects that we'll have to develop, maybe not in 18 months but 24 months, 30 months. Overall, in Nigeria as well, we have a discovery. So, we have overemphasize.

But we wanted to show you what was the list of the projects on which we work immediately as soon – we have for the next 18 months on the table of Arnaud and his team there, a lot to do. We have also to maintain the discipline to continue to maintain the cost-saving program.

So, last question about oil price sensitivity, improved sensitivity, yes, I would say, yes I know. The move that we've done on the Block 32, it has an improvement on the sensitivity. But it was more to cover the low surprise under $60 per barrel. There was no change in sensitivity above $70 per barrel.

The PSC was unchanged globally for the price at which we sanctioned the project. We did not ask for anything. We have negotiated new terms in order to cover the low price where obviously, the project was not profitable enough. So, from this point of view, it helps us to have a better sensitivity between, I would say, $40 and $60 per barrel..

Okay. One at the back on the same side. Christian? (01:41:31).

Hi. Good afternoon, gentlemen. Christian Meyer (01:41:34) from JPMorgan. Two questions please. First, on your financial framework, today, you've increased the dividend and you're investing countercyclically. Yet you talk about oil volatility and therefore want to keep the scrip optionality.

And I understand in a world where oil is potentially low, what exactly is the priority or the effective order in terms of dividend, CapEx in the context of that scrip? The second question is more broadly speaking in terms of sort of the industry and the potential listing of Saudi Aramco. You are clearly best in class because of a variety of metrics.

How do you think your portfolio will change in the context of a listing of Saudi Aramco? Where would you put capital? In the context of your credit potential, how would you change the thinking industrially?.

I think I answered the first one, so Patrick will answer you, but maybe in his own word and his own vision of CFO of the company..

To make it clear, I think we make it clear today that we wanted to maintain the scrip because we are facing a very volatile environment.

So, as at today, facing this world and we do not foresee in the near future another world than the one we are facing today, the scrip will be maintained, maybe with a 0% discount if we face a $60 per barrel oil price, but the priority is to maintain this flexibility. Dividend is a must.

We have maintained and continuously increased the dividend for the past I think 30 years. I think Patrick made it clear that it is not our intention to reduce the dividend. We increased slightly, I recognize, 1.6%. This is not 10%, but this is to give a sign of comfort. We are able to slightly increase our quarterly dividend.

And as I mentioned to you, the dividend for us is a must. We have to pay a dividend, and it's part of our cash flow allocation.

And we have established a level of CapEx, $15 billion to $17 billion including $2 billion of asset renewal, which we believe, thanks to our OpEx cost reduction, lower breakeven, enable us in the current oil price environment to finance from cash flow from operation both CapEx at this level plus a dividend partially or marginally in cash depending on the discount that we will use on the scrip..

To continue on that, I think we will – I hope, anyway, we probably go very shortly to the 0% scrip dividend. Again, it lends its flexibility to take up really less than 20% but if we're facing again a downturn in the cycle, we could react easily to that. By the way, we have met some investors.

For fiscal reasons, in some countries of the world, there are people, investors who are interested to have the optionality of having the dividend in shares and not much but you have some and you can find investors with interests. So, we can enable the 0% scrip dividend, and again, there is no contradiction with that tool and increasing the dividend.

That's important to have in mind. Of that IPO of Saudi Aramco, change the work for you..

I have been offered a position but that's not true..

Me not. Me not. Me not I will stay at Total. Now, frankly, we will see what will really happen with this IPO and what is the value of the company. I'm not sure it's changing a lot of things for us. But we'll see. Now, if we speak about 5%, I didn't know that the value of an oil company was a multiplicator of the reserves of the company.

I had the feeling that was discounted factor somewhere. So, we'll see what will be the value of the company. Now, I don't see the change, the world changing for us from that perspective..

Thank you..

The following questions will be Brendan and Jon..

Thank you. So, it's Brendan Warn from BMO Capital Markets. Thanks for confirming about the ADCO change in terms. Now just to confirm whether there is any retrospective catch-up or windfall from those change of terms? We've been there for a while now.

And then just my second question relates to – you've got a couple of very big LNG projects coming on at the back end of this year. Australia, I apologize for asking where we started strong and we often finish quite poorly most projects, which I think nearly every project in Australia in LNG has been overscheduled in that part of the world.

What are sort of the key risks and concerns and worries do you have going into commissioning certainly in this (01:47:18) if you could also touch on the amount?.

The terms were applicable at the date where they were signed. So, they were signed. We were already in the concession. So, we benefited from the terms immediately. That's all. Nothing else to add on that, but I will not disclose the terms to be clear there are some confidentiality on it. The second question I think was on Yamal and Ichthys.

So, maybe, Arnaud, you can answer on Ichthys first about where are we in terms of completion of Ichthys, the timetable, (01:47:58)..

Yeah. So, Ichthys, the offshore part of the project is almost completed now in terms of all of the subsea system installation, preparing for the arrival of the two offshore structure that will come, the CPF and the FPSO. Both of these units actually are still in Korea, ready to sail away according to the operator in March or April.

They've actually used the season of monsoon, of storms to complete commissioning a bit further so they have advanced – so that they reduce the amount of work that will be done offshore. And in Darwin, last in the LNG plant, work is progressing.

There has been, as you know, some difficulties with one subcontractor but it is on the power plant and it's not on the critical parts of the project. So, according to us, we are still in line for a start-up before the end of the year on this project..

Okay. I think Jon had a question..

Yamal, I can tell you that Mr. Nicholson (01:49:04) is himself on board. He promised me that before his birthday, he will deliver LNG by October 2017. So, I'm observing him, but I trust him. Now, it's progressing well. It's a huge project. The Train 1 order package are there. They are there in Yamal. It's a matter now of commissioning all that.

It's a huge effort to have 30,000 people working in the Peninsula of Yamal. It's absolutely a incredible project. But I think the good news is that the quality of all the modules delivered by the Chinese yards is quite good, is quite excellent. I know it's a huge coordination effort. We have put a lot of teams in terms of commissioning.

We have increased the number of people, experienced people from Total to our operation partners there, so we'll see. But today, as of today, I think we have in our plans in 2017 but then we can surmise the October. So, we'll see.

Yeah?.

It's Jon Rigby from UBS. I've got a question about the financial framework and then just a portfolio question. So, on the financial framework, just wanted to go back to this dividend decision.

It seems extraordinary to me that you start moving the dividend before you rightsize the financial structure of the company in reaction to the change in oil prices.

And I was trying to figure out why that would be the case because it's clearly, the cycle, the first part of the cycle showed yourselves and your peers unable to fund both CapEx and dividend commitments. And yet before we got to the end of the cycle, you're already upping your dividend commitments.

So, I just wondered whether you could just again walk through that decision to sort of preempt the delivery of the efficiencies by lifting the dividend.

And does it actually imply, if I take away from your answers to some of the questions, that the scrip portion is effectively a permanent feature of the dividend now in order that you are well below your expectation of oil prices? That's the first part of the first question.

The second is one of the other features is the fact that you are running a cash shortage over the last three or four years is you put about $10 million of hybrid debt into equity.

Is there an intention to deal with that at some point as free cash flow starts to rise? And then to move away from the financial framework, just on portfolio, you've talked in fairly glowing terms about Brazil. Is there an appetite to deepen further into the Brazilian deepwater pre-salt if the opportunity exists? Thanks..

To be clear, yes, the plan is when the gearing will be at 20%, we will buy back the hybrid debt. Yeah. It will depend on where the interest rates are. The average is a fixed rate, right? If I remember, it's a fixed rate. Maybe in two, three years, it will be good. If interests are high, you will see.

We are conscious of what we have done, but yes, if we have to buy back it, we will buy back it. There's no problem with that. Is scrip permanent? What I told you is that the tool at 0% scrip is not a big issue for the Board of Directors. So, take-up will be minimum but it gives us some flexibility. So, can we keep it? Yes, we can keep it.

But again, somebody asked me the question if we have plenty of cash, what will we do with if we need to. If the market is moving up again and we have the feeling that volatility is more on the outside, we could remove it. But for the time being, with the perspective that we see, one of your peer told me, what happens if U.S.

share increased, the world is going back to $50. I prefer to have to keep it in place. We prefer to keep it in place in order to be able to react. And this is why we decided and with no contradiction between a 0% scrip dividend and moving on the dividend. Looking bigger to Brazil, let's finalize the first deal. It's a strong alliance.

There is potentially some of the steps. I want the first step. And if you want to marry with somebody, you have to give the proof of love before to enter into a longer duration.

So, I think on both sides, frankly, I would say, the marriage is well on its track, and the two, the husband and the wife, I don't know who is who, are quite happy to be together, so we'll see.

I mean, again, for me, it's as I told you, it was quite an involvement of many people around this table at the top level of the company to be able to convince our peers at Petrobras that we could do better with negotiation. And this type of – it's a good basis to be able to develop it and it's up to us, of course, to be able to prove.

But the trust they gave us will be well deserved, but yes, I told you, deepwater, I can – where can I exercise my competencies? In deepwater Brazil. So, we move it. We move there..

Okay. Then it will be Martijn and Lydia..

Hi. Hello. It's Martijn Rats with Morgan Stanley. I wanted to ask you two things. First of all, about Saft, I've heard you say in the past that to start understanding the electricity value chain in these new energy businesses, you sort of have to be in some of these companies. You can't just learn about it just standing by the sidelines.

And I was wondering now that you have the company for, well, a good number of months and you've seen the books, whether the investment is living up to expectations and were there are any lessons you learned so far.

The second thing I wanted to ask is about tax, particularly with the ADCO contract getting in, could you perhaps help us guide a bit to what the tax rate could be in 2017 both from a P&L as well as from a cash perspective?.

Take this.

Tax rate for Patrick maybe?.

Okay. This is a very simple question. As you can imagine, using $50 per barrel, our average tax rate for 2017 should be in the range of 40%, something like this, but it's extremely volatile. There are countries – due to the gas price mainly, which is not reflected in the $50 oil price scenario, where we are close to paying or not paying taxes.

So, my figure may be completely wrong, but that's my best estimate at the moment..

Philippe on Saft..

Well, Saft has been now with us since less than six months. And so, we are still in the process of discovering what is in this company and what is its potential, its additional potential with Total.

What I can tell you is that it's even better to what we have imagined, and we on our side are learning a lot about the potential of different battery technologies.

And on the other side, we are starting and trying to study really a potential development that would combine the know-how of certain of our other affiliates with the one of Saft in order to entertain some new development. It's just a start, but so far, we are very satisfied with the ability to develop both at the same time cash and R&D programs..

Philippe is more happy with Saft. That means simple work (01:57:24) to be honest with you at least in terms of results. But there is one difference. One, this company is 120 years old and they have a business model which works. So, for us, the challenge is how can we help them to change our size.

In fact, (01:57:39) is still trying to look for its own business model, a sustainable one.

Lydia?.

Hi. Hey. It's Lydia. Two questions if I could. The first one is on the global business services unit.

Can you provide the benefits you see from that and help us understand how they could change that really is for Total in terms of the way it operates? And the second one was going back to the slide that you showed on the FIDs and all those being mid-teens upwards, which are impressive rate of returns.

Can you talk about the process as to how you made sure that they really are as good a return that they have really maximized the value coming out of those rather than just taking advantage of the market?.

Thank you, Lydia. I see the solidarity between women. So, you will have the chance to hear the voice of Namita because she is doing many things in the company at the ExCom, in particular TGS. So, Namita, I give you the floor to answer to you..

You heard a lot today about how despite all the good news, we continue to talk about discipline and lowering our cost, and TGS is definitely part of that. We've initially talked about cost savings of around $500 million. TGS was put in place on the 1st of January this year.

We've given the teams a little bit of time to breathe, to find themselves together. It's 1,400 people who find themselves moved from their original homes and put together into a new organization. It's very clear for them what their objective is.

They're working on putting things together to start delivering cost savings by the end of this year for 2017.

And just to give you an example of how different it is in terms of working within Total, just the procurement part of it was very distributed amongst the branches and amongst the affiliates, and it's been completely centralized with very few people in procurement left in each of the business organization because we realize that it was a huge level for us to reduce cost to start mutualizing things, to have or to speak with one voice to our contractors, to have the same kinds of technical requirements.

And so, that's all very much on track, and we will definitely be delivering for 2017..

I think internally, it's a very strong change. In fact, I think we are creating a real group together and not having businesses side by side. And the Comex, by the way, the way we discuss together on many issues, we are working like that. We are now thinking to see how we will organize at the country level.

We speak about concepts like caricatures which was impossible to discuss three, five years ago. So, there is still some efficiency on both sides. It's not only, by the way, a matter of cost. It's also a matter of business.

For example, with regas terminal in Ivory Coast, I can tell you the success has been possible because of course, of gas (02:01:12) from Philippe. But Momar helped because M&As was well implemented in the Ivory Coast. And even Arnaud and (02:01:21) African president because they were there with the operators for exploration helped to do the business.

So, it's a matter of putting everybody together. And when we have one objective like Brazil, when we work on an objective in all Brazil, imagining the package where you put together Upstream, Downstream, gas people, it's a lot of effort, but you need to have everybody aligned.

So, this is a mentality, a mindset, but we are changing the company and TGS is at the forefront. And so, we are pushing for that, and I think it will deliver. It's more than just $500 million of objective. It's being able to deliver more value being a whole group and working together. The second question is can we do better IRR than the ones we showed.

We are not bad. I mean, I know that you want always more, but I would ask you if all the projects that we sanctioned in the year 2010, 2013, 2014 was at 15% of $50, I would not be here today, and we will not discuss about scrip dividend, but we will discuss about a lot of things (02:02:32). So, frankly, maybe we don't have – it's not enough height.

We work hard. I mean, let me be clear. And the market will get us through because as long as you don't go to the market – we had good surprises in market. Zinia 2, we mentioned that project before. We mentioned another one in Brunei. Each time we went to the market, we are a bit of surprised in terms of cost, but on expectations.

So, maybe we are prudent on what we save and Arnaud will add a word on it. Arnaud? So, I will learn we will get the better figures..

Just one point to mention about the continuous improvement that goes on in the company, we have also restructured our technical support division in E&P where we actually are studying conceptual design for new projects by reorganizing them in what we call product line so that we have a product line for deep offshore, one for offshore conventional, onshore conventional, LNG, and unconventional.

And the focus is really for them at the conceptual pre-project stage to come up with the most optimum solution from the point of view of cost benefit doing value engineering.

And by having a transformation from the traditional mix where we had the subsurface, surface, and putting them inside what is effectively focusing on the type of project that has to be sanctioned, we believe we will go further in optimizing the profitability of our project in the future..

You have other questions?.

Thanks very much. It's Rob West from Redburn. I like your slide on page 17 showing the targets and how you've realized them all, so like beating your targets.

Particularly, I want to ask about your production target for this year and how much you think you could beat it if everything goes right, specifically, I mean, some contingencies that might be in that number.

So, whether it's Libya or whether it's some of the projects coming on later or some of the volumes being impacted by the OPEC deal, so if you can give us more of a range, so 4% plus, what could that be? And maybe there's a second part of my question, allay maybe an alternative interpretation of that guidance, just to rule out, are there any assets in the portfolio where the production this year is not coming in maybe as you'd hoped or the production share in contracts are bouncing back quite steeply? Thank you..

The first question, I mean, we say more than 4%. Frankly, I don't know if we will be able to do 4.5% this year. We'll see. I mean, keep in mind, for more than 4%, we did not think – when we made that figure, the OPEC quota were not in place.

The OPEC quota would present potentially for us 20,000 barrel less which is 0.8%, but on the other side, we had good news because Al-Jurf field in Libya opened and represent more or less the OPEC quota. So, from this point of view, we are immune. If Libya maintained its production and HRR went up, it will compensate more as the OPEC quota.

But it's the advantage. We have a large portfolio of fields. Some are going better. Some are going not so good. But as Patrick has told you, I think we are very confident about the production in 2017. You've seen on the chart that the size of the startup is quite small. In fact, it's mainly more beyond there. I was in Congo with Arnaud in December.

Together, teams told us it will be started by March, April, and we are very confident. So, it's moving on those tasks as planned and the ramp up is planned as these figures ensure. So, we are this year, 2017, when we saw the prospection.

And we have quite a little unknown, in fact, except the price of oil and the price of gas which are being announced, but in terms of execution, we have probably less chance, but what is more important is the delivery of the big projects, which are all coming by year-end but, of course, this will be important for 2018.

The second question, I don't know what you – what was the question? What were production growth targets be I just answered to you. I mean, I'm not sure if we have taken the second question if I remember it rightly..

It was just to say are there any assets in the portfolio that are not performing as you hoped that you could flag or the production sharing contract is bouncing back and taking more of the production away that you want to just rule out?.

No At this stage, again, you have plus and minus, but there are no major assets. By the way, the ones we include were already existing assets. It was made to price assumptions not because of problem of reserves or things like that..

Maybe Anish and Lucas at the front..

Hi. It's Anish Kapadia from Tudor, Pickering, Holt. I had a question on the Downstream, first of all. I'm trying to get some sense of oil price impacts and OpEx cuts on the Downstream. So, first part is your petrochemicals business.

I was wondering if you could say how much of your petrochemicals business is exposed to liquid feedstocks as opposed to gas advantaged feedstocks? And then on the Refining side of things, I'm just wondering what kind of sensitivity do you have to higher oil prices in that costs go up in a higher oil price environment but also, in terms of the OpEx cuts with the potential for light-heavy differentials to narrow.

And then the second question is....

Bernard?.

...on the impact of the marine fuel regulation changes. So, the falling sulfur for shipping going forward, just wondering how you think about it.

Is it a bigger opportunity for the Refining business in terms of higher diesel demand going forward? Is it a bigger opportunity for the LNG business from a substitution perspective? And how is Total positioning itself to take advantage?.

Bernard will answer the first question first. So, Bernard, about petrochemicals..

So, as you saw, a large part of the projects we are looking after are projects which are based on gas, on ethane. As we showed in the slideshow, the platforms where we are growing the most industrials are platforms which are also based on ethane-based petrochemicals.

So, clearly, the strategy we are going after is to grow the gas advantaged feedstock petrochemical part of the portfolio. Regarding the liquids, it's more on leveraging the integration between refining and base chemicals, which is what we have done over the last few years which has proven to be extremely successful.

That's mainly for the European part of our portfolio. So, it is doing well, thanks to integration. And the target now is really to increase the proportion of gas-based petrochemicals versus liquids..

Fuels what we can. Okay. There are two people around the table who can answer, Momar and Philippe and Bernard. Everybody is concerned about it. But basically , you can provide them diesel. You can provide energy. And we are working on it. We had recently a good success. I think Momar with Brittany Ferries on energy. You can mention it..

Yeah. Definitely, we've decided to go down the value chain on LNG especially on those markets. You've seen that we've signed with Brittany Ferries last week. And we've signed an agreement with CMA CGM. Patrick did that last week. What customers are asking to us now is okay, there is this cut coming in. You guys are energy providers.

Therefore, we think of ourself as solution providers, and we are working with them on the best solution. Best solution scrubbers are not yet decided, but we will be there. That's the discussion we are having with them.

We'll provide them with whatever solution is the best for the market, and for now, we signed those two deals, and definitely, we are going to be a big player on solutions..

So and it's not very clear today when you speak with the shippers, but we have engaged with CMA, which is one of the three largest on these studies together because they have three options, either to take diesel or to take bunkers, heavy fuel oil with scrubbers or to take LNG.

And we have to better understand the way they themselves think of their own economics so we can offer the three of that, the three projects, the three things. And we have diverse interest. But we have decided to work on six months to see what will be the optimum from a shipper like them in terms of arbitration.

And it's not very obvious what will be their choices. So, we will work with them. It depends probably also – when you speak about LNG, you need to have some rules because it's quite a lot of infrastructure. It's quite heavy. I can tell you if all the players begin to make LNG marine fuel, it will be a disaster from an economic point of view.

We don't have the space for too many players. So, we need to probably coordinate logistics and all that. So, it's a start of the story, but we are definitely willing to not only to be part of the game as part of the integration..

Lucas had a question around the same table..

Thanks. Thanks, Mike and (02:12:49) Patrick. This is Lucas Herrmann, Deutsche. Patrick, I wanted to come back to two things around capital frame and capital choices. In terms of the future, you talked about 1% to 2% production growth. I don't want to obsess about production growth. It's a vision.

But first question is to what extent the FIDs that you indicated you will take over the next 18 months take you towards that number? And within that, what constrains capital, Patrick? Is it capital is absolutely constrained between $15 billion to $17 billion? Absolutely, it's too harsh.

But you used the term earlier, you talked about if I'm at $19 billion and tapping on the shoulder it's a start by tapping on the shoulder at $15 billion to $17 billion in ways and saying or asking do you cycle the project that's – within the $15 billion to $17 billion of intensive spend? Is the idea to stay in that range and if the opportunity set gets better, will some opportunities get deferred, we stay with those which offers the best return, the best IRR, and the capital we're putting down which is in effect is do we believe that the capital that we're putting down is sufficient to drive cash flow growth into the medium term? I'm sorry.

The second part is just is there an intent to remove the dilution and the scrip position or the scrip that's presented to shareholders over the last two years or at least the enhanced elements of the scrip as presented to shareholders?.

So, first question, yes, we say that we were targeting a growth at least in the present market 1% to 2%. Maybe we were not in that condition. I think we are probably more around 2% than 1%.

If we can begin to add on the first year, the various projects that we – if we are able to sanction at the pace benefiting to the market, this could result maybe more in the higher range than the lower range. We'll come back on that to you in September. Sorry but we don't plan everything.

But when I see and particularly know the success in Brazil is announcing us, so when we begin to put to it. But we didn't make the full exercise but already keep in mind 2% rather than 1% on this first point. And then the second point. First, I would remind what Patrick told you.

For example, this year, the organic part of CapEx is $14 billion, $15 billion plus $2 billion of resource addition. So, what we call CapEx, organic CapEx level of development is more under $15 billion, and you have the $2 billion of addition of resource. Last year, we've done for less than that. We managed to renew our resource for less.

Maybe this year, we could have more opportunities with this. So, this part could be, I would say, fluctuating. It was less last year. We spent I think around $1 billion to renew the resource because the deal in Qatar was very low cost deals to have access to our share. So, we'll see what are the opportunities.

But again, I strongly have the feeling that with this type of market we have until the end of the decade, in particular on the supply chain side, we can execute all the projects in delivering 2% growth with a $15 billion on organic CapEx.

And again, if there is something, a huge project which we'll have to defer, we'll come back to you, but for the time being, with the figures, again, I answered to Theepan I think that we have some room to take on both new projects.

We knew that the bulk of the big projects will be delivered by 2018, so we have room to put in this range, in this $15 billion of organic CapEx the new projects we want to sanction, and we can take even more and not only the list that you have seen. So, we see the figures.

And I think again, it's good to be disciplined at this level because otherwise, you will tell us you begin to spend the money, and then it's like a question back to your last question. If we have more cash, yes, I know but we have to return part of it to shareholders. I'm not able to put today in place a buyback of scrip shares. I would lie to you.

I don't have the cash. But I know that will be dilutive to some shareholders in this period in time. It's already in mind. But promising you today something that I cannot execute is not my management style. So, I prefer to tell you when we will be ready, we have more cash, so we can reallocate it.

So, today, what we think is that return to shareholders is important. We are very honest with you about the way we see the situation, the Board of Directors think to it. We are foreseeing in this type of environment, I would say $50, $60 per barrel, that we have a strong balance sheet, that the cash flow will grow. We will develop higher cash flows.

So, yes, we may be by giving $0.01. It's a signal that we trust ourselves we are able to deliver. Board of Directors also had a strong feeling that our share is undervalued compared to our peers. When you make the price to cash ratio, I can demonstrate to you what is undervalued.

And so, we'd like to share our trust and our confidence in the company deliverability, capacity to deliver these additional cash flows with our investors, and enlarging the base of our investors.

What was the other question? Again, 0% discount, I mean, if we have such a success, we have a 0% rate but it's above 20%, maybe I will revise the impact of the dilution, but I don't anticipate that. I think there is a strong difference with our shareholders when they discussed with some investors between a 5%, even a 2% discount, and a 0% discount.

The 0% discount, most of the investors will take the cash. If I'm wrong on this assumption and that there was a larger dilution, maybe we'll have to look at it more carefully. But we base this reasoning on the fact that a 0% discount rate should reduce drastically the dilution.

If it's not the case because the investors love the shares of Total that maybe we'll have to monitor it differently but the basic assumption we have taken when we make this reasoning about the dividend. So, we didn't do it, but we think that there is a strong difference between 5% and 0% or 2% and 0%..

Any more questions here? I think Jean-Pierre..

Yes. Hi. Jean-Pierre Dmirdjian from Raymond James. I have three quick questions, if I may. The first one is not that quick and it's on Argentina (02:20:00). I recently came across a press release you published in January 2011 when you first entered this area. And it was saying that your licenses were awarded for a period of six years.

So, the licenses expired and I understand that you renewed three out of the four licenses for another four years and that the last one was relinquished.

I wonder whether the relatively short duration of these licenses was not an issue for you to effectively inject capital in this area and effectively make the most and produce actually oil from this area.

Don't you believe that it would make sense to perhaps first have a longer duration for these licenses before injecting more capital? The second question is about your dividend pattern. I noticed this morning that you will actually have two dividends in the second quarter of this year.

So, my question is should we expect five quarters of dividend this year or four quarters?.

Four..

Four..

It's clear because we will maintain the scrip dividend even at 0% discount. So, it's only the year where we will eliminate the scrip dividend that we would have to pay for five. So, it's not in this year..

Okay. And the third question, like we've done on production, if you could update us on the decline rates for your base, the assumption you're making this year in terms of the OpEx impacts given the production limitations for the first six months of this year and the sensitivity of PSC. Thank you..

OpEx, I answer that it's around 20,000 barrel per day of impact potentially is mainly Abu Dhabi and Qatar, two big countries. The others are smaller cuts. I'll let you answer to the question on Argentina, Arnaud..

Yes. So, the license we are getting in Argentina are exploration licenses. And the commitment we made is to actually derisk the development phase. It is, of course, unconventional, so what we have to do is do some pilot. And then the morale is that if we are convinced that there is enough potential, then you get a 35-year concession.

So, that's the limited commitment to make in a pilot phase. We think four years is more than enough for us to confirm the quite promising results we've had in some of the area..

So, the PSC price effect is less than 1%. I think it's very minimum, but people in the room will be able to answer more precisely to your question. There is a minimum impact on the dividends we give. So, we pay dividends in January, April, June and December because the general assembly is changing pattern. There is some effects..

We have a six-month delay between the quarter and the dividend payment basically..

Any more questions?.

(02:23:44)..

From Kim in the center..

Hi. Thanks. It's Kim Fustier of HSBC. Just a quick follow-up in the earlier question on production. You've reaffirmed today the 5% production growth guidance all the way to 2020. Yet since last September, you've added big new producing assets in Brazil in particular. So, just wondered if these additions have been offset by negatives elsewhere.

And I'm thinking of things like license expiries such as Mahakam in Indonesia, for example, or are you simply being conservative? So, any detail you could offer on that would be helpful. Thanks..

First, again, Brazil, so these are not fully closed. So ,we need to close them. Second, Mahakam, we told you in September I think that Mahakam extension was not included in the 5%, which is not down because we continue the discussion. There have been some moves recently. So, we see if clearly it's a matter of value, frankly.

We have discussion with the Indonesian authorities. But we want to stay but for something material. If it's not material enough, we don't see why we should. Again, let's remember, we are not chasing for volume. It's a question of value over volume, of allocation of our staff. We have scarce resources of manpower human resources.

Theepan rightly asked us do we have all the people to deliver the projects. So, we don't want to mobilize. Today, we have around 100 expatriates there I think. If we have to mobilize people for a small share even if it's for production, we have to have a real value out of these assets. So, again, no.

But we didn't make – maybe we have – no, we don't make – we have plus and minus. Remember that in our 5% projection, Yemen is supposed to come back by before 2020. So, Brazil could replace Yemen if Yemen does not come back. And frankly, on Yemen, I'm just looking to the news on CNN every day, but I have no official news to give. So, it's a big upside.

So, it's the advantage we have our portfolio. We have assets coming in and assets coming out. Let's keep the 5% as a good guideline but for example, these examples..

Last question maybe..

So, thank you. I hope you were satisfied. We are satisfied by the results of the company. We are satisfied by your question also. We took something maybe some people will say a bold decision. I see John in front of me and it was bold, but at least it's a proof that we are thinking too of shareholders hardly.

We, on one side, delivered, and I think it's important for me, deliver what we told to investors in the last two years and good sets of results, and I'm convinced that the market will reward us for that. Thank you for your listening and for all your questions.

I think we invite you now to have more questions or more answers from you (02:27:03) for drinks together with us. Thank you..