Total project
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The document provides an agenda and overview of Total S.A., a leading integrated oil and gas company. The summary includes: - Total is engaged in all aspects of the petroleum industry, including exploration, production, refining, chemicals, and marketing operations in over 130 countries. - The document outlines Total's business model, which involves vertical integration across the value chain from upstream exploration to downstream delivery to customers. - An analysis of Total's resources, competencies, and the attractiveness and competitiveness of different industry segments like oil/gas, renewables, and chemicals is also provided.
Total project
- 1. TOTAL S.A. Savino Bartolomeo Paula Biste Mathieu Picca Lucas Pilleri Raffaele Triggiano
- 2. AGENDA COMPANY PROFILE BUSINESS MODEL NALYSIS Value preposition Key activity SBU SEGMENTATION INTERNAL ANALYSIS Resourced Based view ESTERNAL ANALYSIS KSF Analysis Competitive Analysis Attractiveness McKinsey SWOT ANALYSIS STRATEGY ORGANIZATION
- 3. COMPANY PROFILE TOTAL is one of the leading integrated oil and gas companies in the world. The company is engaged in all aspects of the petroleum industry, including upstream and downstream operations. TOTAL is also active in the chemicals, coal mining, and power generation businesses. Total at a glance: Fifth largest publicly-traded integrated international oil and gas company in the world 96 104 employees. Operations in more than 130 countries Exploration and production operations in more than 40 countries. Producer of oil and gas in 30 countries. 2011 sales: €184.6 billion.
- 4. BUSINESS MODEL ANALYSIS
- 5. BUSINESS MODEL Value proposition Enable as many people as possible to access energy in a world of constantly growing demand
- 6. BUSINESS MODEL Key Activities Upstream Exploration and production activities in more than 40 countries Production of oil and gas in 30 countries. Production: 2.34 million barrels of oil equivalent per day. Proved reserves: 11.4 billion barrels of oil equivalent as of December 31, 2011 (2). Refine & Chemicals Marketing & Services
- 7. BUSINESS MODEL Key Activities Downstream No. 1 Western European Refiner-Marketer and No. 1 Marketer in Africa. One of the leading traders of crude oil and refined products worldwide Refining capacity: approximately 2.1 million barrels per day. Retail network: nearly 14,819 service stations. Sales of petroleum products: approximately 3.8 million barrels per day. Brands: TOTAL, Elf, Elan, AS 24
- 8. BUSINESS MODEL Key Activities Chemicals Total is one of the world’s largest integrated chemical producers and a leader in each of its markets - Petrochemicals and Fertilizers, Specialties
- 9. BUSINESS MODEL Summary Vertical Integration All activities fully integrated, advantage of sinergy effects Total controls all stages of the value chain from exploration till the delivering of the product to the customer
- 10. BUSINESS MODEL SBU Upstream Downstream Chemical
- 11. SEGMENTATION Oil & Gas Green energies • Exploration, • R&D production and • Promotion refining Chemicals Supply & • Oil and gas derivates Marketing • Fertilizers • Sales of refined • Resins products • Retail
- 13. RESOURCE BASED VIEW Tangible intangible human •Infrastructure (off- •Perforation •Local employees shore platform, agreements •Trading network pipelines, •100 year of •Engineering RESOUCES equipment) experience expertise •Means of transport •Global mindset •Public relation •High end •CSR values policy technology •Distribution p.o.s Company know how Org. routine COMPETENCES •Exploration; explotation •Logistic process •R&D development •Local recruitment
- 15. KSF - UPSTREAM
- 16. KSF – DOWNSTREAM
- 17. KSF – CHEMICAL
- 18. ATTRACTIVENESS Total is involving in project in order to develop biofuels in partnership with the leading companies in this sector Expanded production of solar photovoltaic power Investing in Renewable Energies
- 19. COMPETITION ANALYSIS: WEIGHT AND PERFORMANCE Net results 2011 35 000 Exxon Mobil 30 000 25 000 Chevron Royal Dutch Shell 20 000 BP 15 000 TOTAL 10 000 Conoco Eni Philips 0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 Revenues 2011
- 20. THE EVALUATION OF THE ATTRACTIVENESS OF THE SEGMENTS Global oil, gas & Global renewable consumable fuels market energy market value Year $ billion € billion % Growth Year $ billion € billion % Growth 2007 5,883.5 4,231.1 2007 433.1 311.3 2008 6,431.2 4,625.0 9.3% 2008 450.1 323.6 3.9% 2009 6,967.1 5,010.5 -35,8% 2009 461.8 331.9 2.6% 2010 9,026.9 6,491.8 29.6% 2010 484.9 348.6 5.0% 2011 5,797.6 4,169.4 38,3% 2011 500.3 359.6 3.2% CAGR: 2007–11 10% CAGR: 2007–11 3.7% Global specialty chemicals Global oil & gas marketing market value and supply market value Year $ billion € billion % Growth Year $ billion € billion % Growth 2007 691.3 496.9 2007 300.7 216.2 2008 733.9 527.6 6.2% 2008 361.9 260.2 20.3% 2009 683.7 491.4 -6.9% 2009 256.5 184.4 -29.1% 2010 735.0 528.3 7.5% 2010 313.3 225.2 22.1% 2011 767.5 551.7 4.4% 2011 399.8 287.3 27.6% CAGR: 2007–11 2.7% CAGR: 2007–11 7.4%
- 21. INTERNAL ANALYSIS: MCKINSEY MATRIX Low Medium High Oil and gas Renewable High energies Industry attractiveness Marketing Medium and supply Chemicals Low NB: The size of the circles represents the market Business strength (competitive position) value
- 22. SWOT ANALYSIS Helpful Harmful •A strong market •Oil spill in the Atlantic Internal original presence coupled with •Violation of anti- integrated operations competitive laws •Strong R&D capabilities •Leadership position in refining and marketing •Expanded production of External original •Environmental solar photovoltaic regulations Power •Regulations concerning •Strategic initiatives in Iran the area of biofuels •The US credit downgrade •Establishment of Jubail may impact the future oil Refining and prices, placing a •Petrochemical Company downward pressure on Total’s sales
- 23. STRATEGY
- 24. STRATEGIC ANALYSIS OF THE TOTAL GROUP Factors influencing strategy decisions The fluctuation of gas and oil prices The increasingly more difficult access to reserves The scarcity of resources The increasing of geopolitics risks and petrol nationalism The change in global demand for petro products And the environmental issues Strategy in upstream Investment policy in exploration and extraction activities Geographic and technical diversification in the production of hydrocarbons Integration into LNG Objective of becoming the 2nd world producer Huge investments in new projects to diversify supplying
- 25. STRATEGIC ANALYSIS OF THE TOTAL GROUP Restructuring activities Adaptation of activities of refining in Europe to oil demand Development of markets in Asia and Middle-East Reorganization of different poles in the Group Enlarging the energetic value offer Prepare the after-oil Improve the group image Development of biofuels, solar energies and nuclear energy
- 26. ACTIVITIES REORGANIZATION Current organization of Total’s activities Upstream Downstream Chemicals Exploration and Fabrication of Refining and production of petrochemical distribution hydrocarbons products New organization of Total’s activities Downstream- Downstream Upstream industrial -commercial Exploration and Refining and production of Distribution, fabrication of hydrocarbons petrochemical marketing- products supply
- 27. STRATEGY FOR THE LONG TERM Development in the solar and biofuels sectors Long term strategy because preparation of the change in demand for the next decades Nuclear Alliance with EDF GDF Suez but Fukushima events put a threat on this project Solar Acquisition of 50% in Tenesol, and 100% of Photovoltech, agreement with Sun power to develop solar panels Biofuels Production of methanol and dimethyl ether Eolian Central built in Mardyck in the Flandres
- 28. CORPORATE STRATEGY FOR UPSTREAM: VERTICAL INTEGRATION Upstream To answer the increasing demand in oil globally, Total wants to develop the activities of extraction and exploration of new reserves through vertical integration, which provides the company with a good supply chains control and improve efficiency
- 29. CORPORATE STRATEGY FOR UPSTREAM: VERTICAL INTEGRATION Three main factors reinforce the interest for this integration: The average annual price of the barrel reached in 2011 an historic price of 120 dollars and made profitable the exploitation of reserves that require complex technology; The events in Libya and Iran encouraged Total to diversify and to integrate its supplying; The exploitation margins have been reduced in refining (the capacity of refining is greater than demand in Europe). In October 2010 Acquisition of 60% of Yam’s petroleum, an Ivoirian oil company, to get access to offshore reserves In January 2011 Exploitation agreements in Argentina to exploit shale gas in Neuquen Lake In March 2011 Acquisition of 33% in three agreements to exploit Albert Lake reserves In December 2011 Agreement with Novatek to exploit a field in Russia by 2015 for 65,000 barrels a day In January 2012 Acquisition of 25% of oil sands in Ohio, USA, by creating a joint-venture with Chesapeake and EnerVest
- 30. CORPORATE STRATEGY FOR DOWNSTREAM: VERTICAL INTEGRATION AND GEOGRAPHICAL DIVERSIFICATION Downstream Improve presence in Liquefied Natural Gas (LNG) and obtain greater market share Presence in North America, Algeria, Angola, Nigeria, Australia, Pacific Asia Development of liquefaction, regazification, maritime transport, stockage
- 31. CORPORATE STRATEGY IN DOWNSTREAM: LINKED DIVERSIFICATION Due to low refining margins in Europe, Total decided to remove its activities progressively in this sector and implanted them into the new emerging markets of Asia and Middle-East. Furthermore, in order to improve the profitability of downstream activities, Total announced in October 2011 the fusion of refining and petrochemicals activities. This operation will allow industrial synergies with economies of scope. They put in common the key resources and competencies of both the refining and petrochemicals activities in order to create synergies February 2010 Closure of refinery in Dunkerque, France January 2011 Modernization of the refinery in Normandie to readjust the production of diesel February 2011 Selling of 48% of the Spanish CEPSA equity for $3 billion in order to reduce the refining capacities in Europe October 2011 Announcement of the fusion between refining and petrochemicals activities + creation of a marketing-supply division, in order to create synergies
- 32. CORPORATE STRATEGY FOR CHEMICALS: VERTICAL INTEGRATION AND MARKETING DIVERSIFICATION • Vertical integration: as for the other segments, Total wants to reduce its costs and get higher market share through a lot of acquisitions, and alliances, as illustrated in the chart below. • Moreover, they intend to diversify their products within this particular segment by proposing a higher range of petrochemical products
- 33. SBU STRATEGY VALUE Breaktrough strategy High & differentiation GREEN + ENERGY CHEMICALS OIL&GAS Low and differentation Reference offer - M&S - + PRICE
- 34. Oil & Gas • The need for oil and natural gas is steadily rising throughout the world. Production tests are used to evaluate the feasibility and profitability of the project. Total’s forecasts are based on an expectation of strong production growth by 2015 Chemical • We aim to unlock synergies to be more competitive, optimize the management of feedstock streams, capital expenditures and maintenance turnaround at certain production sites and pool support functions
- 35. Green • TOTAL has developed expertise in the power generation sector, especially through cogeneration and combined cycle power plant projects. TOTAL has committed to developing innovative technologies to improve its portfolio, becoming more specialized and provide special product to the market Marketing & Services • Total is developing its activities in line with several objectives. We aim to maintain our commercial competitiveness, In every region of the world, the Marketing & Services organizes the sale of products to meet local requirements.
- 36. FOCUS ON DIFFERENTIATION LIMITATION FOCALISATION GREEN ENERGY NICHE PURIFICATION IMPROVEMENT M&S WHOLE LOW HIGH HAND HAND
- 38. MULTIDIVISIONAL ORGANIZATION ADVANTAGES •Flexible (external influences and factors) •Possibility to track the performance • each branch is specialized in its own activities and competences. DISADVANTAGES •Duplication of central and divisional functions •Likely to lose the central control What do we do better: Sharing BCP (best case practice) Long term training policy: Personal developement & skill developement Doing more to reward all aspects of performance
- 39. CORPORATE GOVERNANCE Total has been actively examining corporate governance matters, with a: Board of Directors The Executive Committee Management Committee
- 40. CULTURE Functional division National Funds Pilot project could be funded, and with future management development Organizational •Attracting Talents •Diversity Organizational The •Employee Relations •Fair Compensation field individual and Benefits Take in care of •Developing Skills Christophe de Environment issue Margerie (CEO)
- 41. ETHICAL BUSINESS CONDUCT The core principles underpinning Total’s Code of Conduct are: Upholding human rights. Preventing corruption and fraud. Promoting free competition. Promoting financial transparency. Respect for people. In all host countries where Total does business, Total educates and shares with our employees our business principles and rules of individual behavior — which are based on the values of respect, responsibility, integrity and exemplary behavior — and requires employees to apply these principles.
- 42. INITIATIVES AND PARTNERSHIPS The United Nations created the Global Compact in 2000 following a call by its Secretary-General urging businesses to play an active role in the globalization process. Partner companies must annually reaffirm their commitment and report their progress on one or more principles on the UN’s Global Compact web site through a Communication on Progress. Total is involved even in: Extractive Industries Transparency Initiative (EITI) Voluntary Principles on Security and Human Rights (VPSHR) International Chamber of Commerce (ICC) International Petroleum Industry Environmental Conservation Association (IPIECA) Institute of Business Ethics (IBE) Global Business Initiative on Human Rights (GBI)
- 43. STOCKPRICE DEVELOPMENT
- 44. STOCKPRICE DEVELOPMENT Compared to the market (CAC 40) Total’s stockprice shows a paralel development with only one critial price-fall in the last five years by the end of 2008 due to the financial crisis. Total S.A. makes 12.55% of this market index, a fact which explains the similar development of the firms stockprice.
- 45. STAKEHOLDERS Employees Activist CEO Groups Owner Customers Shareholder Total S.A. Creditors Suppliers Governments Society
- 46. PRO SHAREHOLDER Strong shareholder policy Constant dividend growth Constant investment in new projects inspite of their controversial nature Construction of a pipeline in Mianmar condoning the use of civil sclavage inspite European’s Union’s sanctions Acusations on corruption Corruption in the Italian division of the company Acusation of having done payments to Irqui officers during Sadam Husseins regime to secure oil supply
- 47. PRO STAKEHOLDER Strong engagement in CSR initiatives: Global Compact GRI: Global Reporting Initiative Due to local recruitment policy Total S.A. contributes in the countries of operation by creating jobs and enhancing economic growth Strong commitment in R&D investment in new energies to gradually leave energy production based in fossil energies although this sector doesn’t bring hughe revenue yet (long term vision)
- 48. SOURCES http://www.total.com/ Xerfi MarketLine