Annual Report 2002 Contents

Annual report 2002 Contents 01 Chairman’s Message 10 Corporate governance 18 Sharing our energies 26 Investor Relations 34 Management report 40 2002 Industrial events 42 Information on the Company 78 Financial informations Key Figures 2002 Abbreviations b . barrel t . metric ton B . billion cf . cubic feet boe . barrel of oil equivalent T . trillion /d . .per day k . thousand MW . megawatt /y . per year M . million e . euro As used in this report, the terms TotalFinaElf, Company and Group, refer collectivelly to all the companies affiliated with TOTAL FINA ELF S.A. © TotalFinaElf April 2003. Key Figures 2002 Financial data In millions of euros, except earnings per share, dividends and percent amounts. 2002 2001 2000 Sales 102,540 105,318 114,557 Operating income from business segments(1) 10,995 13,121 14,884 Net operating income from business segments(1) 5,868 7,564 8,035 Net income (Group share)(1) 6,260 7,518 7,637 Earnings per share (in €) (1)(2) 9.40 10.85 10.80 Dividend per share (in €) (3) 4.10 3.80 3.30 Net debt-to-equity ratio 29% 31% 33% Return on equity 20% 24% 27% Cash flow from operating activities 11,006 12,303 13,389 Gross capital expenditures 8,657 10,566 8,339 Operating highlights 2002 2001 2000 Hydrocarbon production (kboe/d) 2,416 2,197 2,124 Liquids production (kb/d) 1,589 1,454 1,433 Gas production (Mcf/d) 4,532 4,061 3,758 Refinery runs (kb/d) (4) 2,349 2,465 2,411 Refined product sales (kb/d) (5) 3,751 3,724 3,695 (1) Excluding non-recurring items. (2) Computed with fully diluted weighted average number of shares. (3) 2002 dividend: subject to May 6, 2003 AGM. (4) Including share of Cepsa. (5) Including trading and share of Cepsa. Financial Overview 2002 Sales (M€) 114,557 105,318 102,540 2000 2001 2002 Earning per share* (€/share) 10.85 10.80 9.40 2000 2001 2002 * Excluding non-recurring items Net income* (Groupe share) (M€) 7,637 7,518 6,260 2000 2001 2002 * Excluding non-recurring items Dividend per share (€) 4.10 3.80 3.30 2000 2001 2002 Operating income from business segments* (M€) 14,884 1,627 13,121 1,095 10,995 3,144 3,004 777 909 10,113 9,022 9,309 ■ Upstream ■ Downstream ■ Chemicals 2000 2001 2002 * Excluding non-recurring items Gross investments by segment (M€) 10,566 279 8,657 8,339 1,611 184 186 1,180 1,353 1,237 1,112 1,163 ■ Upstream 5,639 7,496 6,122 ■ Downstream ■ Chemicals ■ Corporate 2000 2001 2002 Business Segments Overview Liquids and gas production by region (kboe/d) 2,416 Upstream 2,197 2,124 729 759 873 632 620 671 45 54 49 ■ Europe 220 ■ 197 219 Africa ■ North America 512 550 607 ■ Asia ■ Rest of the world 2000 2001 2002 Refined product sales (kb/d) including Trading 3,751 3,724 3,695 Downstream 780 698 776 2,915 3,026 2,975 ■ Rest of the world ■ Europe 2000 2001 2002 2002 Sales by sector Chemicals 19.3 G€ ■ Base chemicals and polymers 40% ■ Intermediates & Performance Polymers 20% ■ Specialties 40% Liquids and gas reserves (Mboe) 11,203 10,978 10,762 3,802 4,017 3,972 6,960 6,961 7,231 ■ Gas ■ Liquids 2000 2001 2002 Refining capacity (kb/d) at year-end 2,660 2,580 2,562 307 285 331 2,255 2,295 2,329 ■ Rest of the world ■ Europe 2000 2001 2002 2002 Operating income by sector* ■ Base chemicals and polymers ■ Intermediates & Performance Polymers ■ Specialties * Excluding non-recurring items Group Shareholder Base At year-end 2002, the Group’s estimated shareholder base was as follows: By shareholder category ■ Stable shareholders & other registered shareholders 11% ■ Employees 3% ■ Share owned by the Group 7% ■ Other 79% By region ■ France 36% ■ Rest of Europe 42% ■ North America 20% ■ Rest of the world 2% TotalFinaElf has approximately 540,000 shareholders. Human Resources 2002 Employees by region 2002 ■ France 44% ■ Rest of Europe 31% ■ Rest of the world 25% Employees by segment 2002 ■ Corporate 1% ■ Upstream 11% ■ Downstream 29% ■ Chemicals 59% Consolidated subsidiaries. Employees at year-end: 121,469. Amont 1 Titre 2.1 In 2002, TotalFinaElf distinguished itself once again as one of the most dynamic and best performing players in the global energy industry. Most impressive was our historic 10% increase in hydrocarbon production, driven by start-ups and expansions of large-scale, innovative Upstream projects. In view of the challenging 2002 market environment, which was generally more difficult than the previous year, our achievements in the face of an economic slump in Europe and even more severe conditions in parts of Latin America are particularly gratifying. THIERRY DESMAREST CHAIRMAN AND CHIEF EXECUTIVE OFFICER 2 We continued to implement the self-help programs that The Group’s hydrocarbon reserves stand at 11.2 billion were launched after the mergers. Increased production, oil equivalent barrels, an increase of 2%. use of synergies, and productivity efforts enabled us to At our current rate of production, our proved reserve limit the negative impact of the economic environment. life is approximately 12.7 years. In 2002, the Group posted net income, excluding non-recurring items, of 6.26 billion euros, a decrease We continue to devote about two-thirds of our annual of 17% from the previous year. Net earnings per share investments to the Upstream sector, mainly to large excluding non-recurring items were 9.40 euros versus projects with low technical costs, for the purpose 10.85 euros in 2001, a decline of only 13%, due in part of continuing sustainable and profitable growth. to the substantial stock-buyback program that Accordingly, more than ten new fields are set continued into 2002 at a strong pace. Expressed in to commence production by the end of 2003. Over dollars to be more comparable with the other major the next five years, our goal is average production oil companies, our earnings per share excluding growth of 5% per year. TotalFinaElf’s will continue to non-recurring items declined by only 8% while our broaden its presence in the gas and power sector using main competitors experienced declines ranging from targeted projects, to better exploit existing gas reserves, 22% to 34%. develop new commercial natural-gas reserves and Our goals are to set the standard not only with our promote renewable energies. financial performance, but also with our stringent requirements for operational safety, environmental Our goals are to set protection and stronger ties with all parties that have a stake in our activities. Their combined effects the standard not only with on value creation, safety and sustainable development are key to the future success of TotalFinaElf. To that our financial performance, end, in January 2002, I set up new organizations but also with our stringent within the Group focused on safety, the environment and sustainable development. Two new divisions – requirements in terms the Industrial Safety Division and the Sustainable of social and environmental Development and Environment Division – gave new momentum to the initiatives undertaken in the Group’s responsibility. various areas of activity and mobilized our employees. We place a high priority on controlling greenhouse In 2002, the market environment of the Downstream gas emissions for all of TotalFinaElf’s industrial sectors. segment was particularly difficult. Refining margins In so doing, we intend to demonstrate that a responsible in Europe shrank further, beyond the decline already manufacturer can take ambitious initiatives vis-à-vis experienced the previous year, and were at the lowest the problems of our world and respond to them without level seen in many years. The Downstream results waiting for regulatory measures to be established were also affected by an unusually large program of by governments or international organizations. turnarounds that affected seven of our twelve refineries This year, we are also presenting our efforts in Europe. We took advantage of those turnarounds at sustainable development and their results to implement an ambitious program of maintenance in the most specific terms possible, in the Group’s and upgrading for the refining system. This positions first social and environmental report entitled us to respond to anticipated future regulations that will “Sharing our energies.” require automotive fuels with very low sulfur content. With that program, TotalFinaElf demonstrates its desire In the Upstream segment, the 10% increase in our to modernize its industrial toolbase, making it more oil and gas production in 2002 was the largest increase efficient and effective, and confirms its commitment to among the major oil companies. The increase was industrial risk prevention and environmental protection. primarily due to contributions from Girassol in Angola, Also in 2002, a new marketing strategy was implemented Sincor in Venezuela, South Pars in Iran and Elgin to segment the network in France between the Total Franklin in the British North Sea. brand and the Elf brand. Outside of France, the Group continued to unify its networks under the Total brand Message from the Chairman 3 and further improved its geographic and competitive At that same Annual Meeting, we will propose changing positioning by strengthening its activities in growing the name of the company from “TOTAL FINA ELF S.A.” markets and divesting marginal positions. to “TOTAL S.A.” The name “TotalFinaElf” was created to bring together the teams of the three companies In 2002, our Chemicals segment once again faced that gave rise to the current Group. The success very difficult market conditions. In Base chemicals and of the mergers has enabled us to enter a new phase polymers, the environment was particularly depressed and give the Group a clear and simple name that in the ethylene/polyethylene chain and in the chlorine can benefit from the service station network’s brand chain.

Load more