TotalEnergies SE (TTE) 2007 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Total conference call.

I now hand over to Mr.

Robert Castaigne, Chief Financial Officer.

Please go ahead.

Thank you.

Hello, and thank you for calling in.

By now you have all seen our third-quarter results and the results of our peers.

I am sure that you have probably heard all about the microenvironment into numerous conference calls you have already attended.

So let's go straight to the results.

We have a very good quarter both operationally and financially.

Actually, Total had by far the best performance among the majors, while most of the typical metrics both of the quarterly and year-to-date basis.

First, despite (inaudible) predictions, price effects and other impacts, Total is the only major oil to increase production so far this year.

Then in the third quarter the adjusted net income was up by 4% year-over-year to $4.1 billion.

And EPS was up by 5%.

Year-to-date the EPS was up by 2%.

Adjusted cash flow in the last was up by 4% on a quarterly basis and 5% year-to-date.

Our business segment to achieve, remains at a very competitive level of 26%.

And we have continued to increase our dividend very substantially.

All of that was achieved in an environment that was mixed but still very good.

Comparing the first nine months of 2007 to the same period in 2006, on average oil prices were flat.

Gas prices were sharply lower.

(technical difficulty) margins were better on average but volatile.

Inflation is continuing to impact the cost base.

And the dollar continues to weaken.

In terms of cash flow, looking at the first nine months our adjusted cash flow from operations was $17.4 billion.

This represents a very competitive increase of 5% over the same period last year.

We have invested $10.3 billion to grow the Company, was the same amount as last year.

And we ended the third quarter with a gearing of 24% in line with our target range.

Looking now at the rest of the year, we should invest something close to our budget of $16 billion for 2007.

We will pay the interim dividend next week.

So this is $3.3 billion that will go directly to our shareholders.

This is on top of the $5 billion that we returned to our shareholders in the first nine months of the year through dividends and buybacks.

And to the extent that we have net cash flow (inaudible) as to CapEx and dividend, we will continue to buy back shares.

So overall, these results illustrate how the strength of Total, notably the (inaudible) and will continue to lead to differentiated results in a volatile environment like this one.

Now on the business development side we continue to be very successful.

Since the beginning of the third quarter Total managed to capture significant growth opportunities, in particular with first [stock value] (inaudible).

Also some new very promising blocks in Nigeria to supply future LNG project and a new world-class [Asantaka] project with [Sanantak] Nigeria.

In addition, we are continuing to explore successfully.

We have recently announced some nice discoveries in Angola, Congo, the UK, Indonesia and Thailand.

Overall, we are in line with our exploration program for the year.

With this, and all that has been done over the past two years to capture new giant opportunities, we have significantly expanded the potential for future growth.

We have created what we believe is one of the best positions and most diversified asset portfolios in the industry.

Notice that on one side our exposure to declining areas in fixed margins is limited of the (inaudible)while on the other side our leading positions in the fastest-growing segment of the industry are increasing quarter after quarter.

So now I will comment briefly on the segments, starting with the upstream.

Our reported volumes for the third quarter were 2.35 million barrels of oil equivalent a day.

This is an increase of 2.5% compared to last year.

The underlying growth was 6.5%.

This takes underlying growth into account the net effect of new production minus normal declines and production shutdowns.

This underlying growth was partially offset by some specific items.

Minus 1% for the price effects on entitlement volumes, and for OPEC reductions; -1.5% for transition portfolio, notably in Dubai and -1.5% for shutdown of Nkossa.

Altogether this business, the 2.5% of reported growth.

Net operating income for the upstream segment expressed in dollars increased by 18% in the third quarter 2007.

If we exclude from the third quarter 2006 the special charge related to the increase in the UK petroleum taxes for the first and second quarter, the net operating income was up by 10%.

The upstream (inaudible) was very competitive with 32%.

For the upstream all of this represents clearly the strongest performance among the majors and it demonstrates that combining a return to production growth with our high quality portfolio will be reflected in our future results.

Now for the upstream looking at the first nine months.

The Brent price was $67 per barrel on average, flat compared to the first nine months of last year.

Our realized price for oil increased by 1% and for gas decreased by 12%.

Our average hydrocarbon realizations were down by 2% compared to last year.

Upstream net operating income per barrel moved in line with our hydrocarbon price realizations down by 2%.

This represents by far the best performance among the majors and it illustrates our sensitivity to the environment, our core discipline and the positive impact of the recent production growth on the portfolio mix.

In terms of production growth, on a year-to-date basis production was 2.37 million barrels of oil equivalent per day, which represents an increase of more than 1% compared to last year, with the first nine months.

In the year-to-date comparison we had 4.5% of underlying growth that was partially offset by some specific items.

-1.5% for the price effect and for OPEC reductions, minus 1% for changes in the portfolio notably in Dubai, and minus 1% for the shutdown of Nkossa in Congo.

Most of the growth came from fields that started up last year, notably Dalia and Shah Deniz, plus new field new startups this year that are still ramping up.

And for example Rosa, that reached close to 90,000 barrels per day at the end of the quarter and that will continue to increase up to a plateau of 150,000 barrels per day in the first part of 2008.

Dolphin was around one billion cubic feet per day at the end of the quarter, and it should reach the plateau of 2 billion cubic feet per day in the first half of 2008.

Snohvit started up and the first LNG cargo was lifted in October.

So plateau for Snohvit of 420,000 barrels of oil equivalent per day should be reached in 2008.

I would like to make a very important point for you about the mix of production growth and the bottom line effect.

Most of the 3.5% of production that we lost, that is to say the price effect, the portfolio changes, OPEC, Qatar and Nkossa was relatively low margin production.

In fact, the bottom line impact from these negative items was around -1.5% of the net operating income for the first nine months of the year.

In contrast, the bottom line impact from the 4.5% of the net growth was around 7.5% of the net operating income for the same period.

For 2007 now we indicated in September that full year production growth should be in the 1 to 2% range depending on the oil price.

We are globally on track and on budget with the next wave of startups.

The most important of these are [Jura, Mobil Ando, Acpo] and Yemen LNG.

So 2008 and 2009 look to be in very good shape.

These are high quality [permits] and they should be accretive to our earnings.

So that was all the upstream, and I move now to downstream.

TRCV refining margin indicator set to $24 per tonne in the third quarter compared to $29 per tonne last year and $43 in the second quarter.

Adjusted net operating income for the downstream was $0.7 billion compared to $1 billion in the second quarter.

Refining throughput in the third quarter was 2.47 million barrels per day.

Actually 5% increase from the previous quarter mainly due to lower turnaround activity.

So downstream (inaudible) was 22% for the past 12 months and 19% for the quarter on an annualized basis which shows that our downstream segment is very resilient even in a moderating environment.

Also in the third quarter we announced an agreement to sell our stake in the Milford Haven refinery in the UK to our (inaudible).

This transaction should be recorded in the first quarter.

We began the construction of new desulfurization units at the Lindsey refinery in the UK and at the at the Leuna refinery in Germany.

This is part of our strategy to add conversion capacity and to focus on largest refineries.

And in terms of scheduled turnarounds, the impact on the first quarter should be similar to the third quarter or even a little (inaudible).

Chemicals now.

Demand for petrochemical products was good in the third quarter and the margins were better except for aromatics.

Adjusted net operating income for the chemicals was $0.3 billion, which was slightly above the levels reported in the second quarter of this year, and the third quarter of last year.

It is difficult now to predict how the chemicals will perform in the fourth quarter because the price of naphtha has been increasing with our prices.

For the specialties, the third quarter usually reflects some seasonal weakness, and normally we would expect the fourth quarter to be a bit stronger.

Also as you know the third quarter was very good in terms of growing the best chemical portfolio, and in particular we started up two petrochemical expansion projects, one in Qatar and another in South Korea.

So we should keep strengthening our chemicals over time.

Corporate now.

Interim dividend of EUR1.00 per share will be paid on November 16.

This represents an increase of 15% compared to the 2006 interim dividend and in dollars at the current exchange rate it is close to a 30% increase.

So gearing should remain in the 25% to 30% target band.

Looking now at the market environment in the first quarter, so far it continues to be volatile.

The dollar has fallen to new lows.

By the way from time to time we are [asking to] exchange the euro/dollar exchange rate have a greater impact on Total than on the other majors.

Particularly, I think that we are all in a dollar-dominated industry.

And we all have broadly the same exposure to our used currencies.

Total reports in EUR, so the effect is more visible.

But ultimately I think we are all affected in pretty much the same way.

Oil prices have set new records, and today Brent is trading at more than $95 per barrel.

Gas prices in Europe are better on average than in the third quarter, thanks to the progressive recovery of the UK gas market.

Refining margins in October were in line with the third quarter average but have been increasing rapidly so far this month.

And petrochemical margins are under some pressure from the rapidly rising oil prices.

So the fourth quarter environment should be volatile but generally good.

In any case, our strategy is based on delivering positive organic growth.

Looking ahead to next year, we will make the 2008 strategy presentations in February, as usual.

So please understand that we do not intend to go into detail on certain subjects for 2008 at this time.

So that concludes my remarks, and I am now ready to take your questions.

(OPERATOR INSTRUCTIONS) Gordon Gray, JPMorgan.

Good afternoon, gentlemen.

A couple of quick questions, if I could.

Price in the downstream, following the disposal in Milford Haven, are you now comfortable with your refining asset base?

And its geographical mix particularly your continued strong European buyers?

And secondly are you also still comfortable with prospective returns on the [Dubai] project given the current environment in terms of cost escalation?

Thanks.

Comfortable with our downstream portfolio in the UK, the answer is yes.

It is clear that in the future we might be led to make some additional, specialty conversion plants.

To do that it is clear that it can only be made in refineries that have the suitable size.

Which means that in the future we might have to continue to adapt our refining portfolio.

But this is not for tomorrow morning.

It is clear that it is something that we have to take into account.

Concerning the Jubail, I think that in fact we are now assessing the cost of this project.

And the idea is to take the decision at the beginning of 2008 so it is something that we will discuss further in February.

Okay.

Thanks very much.

[Jean-Luc Koman, CIMC Securities]

-- the reasons related to the project could be considered as the reserves if and when there is a final investment decision.

It all seems to have been not so sure about that.

Could you comment?

The second question is about your (inaudible) project with (inaudible)--.

Will Total take part to new gas development to feed this project with gas?

[Synertak] project, no, in fact the (inaudible) will be delivered by [Synertak] and Total is not going to participate to new gas development to feed this project.

What was your question concerning the reserves please because I think the line was bad when you started talking.

Sorry.

Stating that the reserves in Shtokman could be considered as reserves when final investment decision is made.

The answer is yes, but.

It all was not so sure about that (inaudible) different.

I think it is clear that when the project will be launched when the decision to launch a project will be taken.

I think Total we clearly have the possibility to book its share of the reserves.

There is no doubt about that.

This has been confirmed.

Dan Barcelo, Banc of America.

Good morning, gentlemen.

Regarding third quarter volumes very strong and going into fourth quarter the ramp up for (inaudible) the Snohvit Dolphin and Nkossa recovery.

I don't know if you can just such a little bit more about what to expect in the fourth quarter and I recognize you don't want to discuss '08 at this time.

But I am just looking to get more comfort that Snohvit, Dolphin as you discussed Nkossa recovery is on track and there is no offset.

The second question is if you can just touch on the buyback rate, it slid a bit in the third quarter relative to the first half rate.

I recognize the focus on cash dividends but I just wanted to confirm what type of excess cash flow you're looking at to see how that buyback rate could continue.

Thank you.

Concerning the buyback for the whole year we are in line something I would say around 1.5% of the equity.

Concerning the Dolphin now, you know that the first gas was produced in June.

Exported in July and we are now I would say at the end of the first phase of the production, is one million cubic feet per day that was reached in fact in September.

You know that we are also second phase and should plateau for this second phase of another one billion cubic feet per day should be reached something in the second quarter 2008.

Concerning Nkossa now, we have reached about one-third of our production, 20,000 barrels per day on a maximum of something like 65 of our share.

A new flow line has been connected and we think we should be able to increase our production to 45 barrels per day by the end of November.

And that is to the last third of our production capacity, we have to produce a second flow line.

So I think it should take place in the last third increase, something in 2008.

So we should finish the year with a production of 45,000 barrels per day and somewhere in 2008, we should be able to recover the 65 barrel per day, 65,000 barrels per day that we had before.

Thank you very much.

Irene Himona, Exane BNP Paribas.

Good afternoon, Robert.

I was wondering if you already receiving compensation (technical difficulty) at Tencor and if you are, can you say how much that might be?

Secondly, again in E&P in previous quarters you had some positive effects from the changing sales to production ratio.

Was that a feature this quarter?

And my final question is I note your results is all in US dollar terms; can you say if you are contemplating changing your reporting to the dollar.

I think no, we do not intend now to change the reporting.

Also we could do it, but we are the first market capitalization of (inaudible) and it is not so easy to take the decision to change reporting from EURO to dollar.

So I would say it is something we continue to think about it, but it is not an end of use decision.

Concerning the ratio of sales I think I have in mind that we should be by the end of the third quarter a little under (inaudible) so that we should recover in the fourth quarter this position, and this would be a small plus, but a plus for the next quarter.

Concerning compensation for Sincor, in fact you know that we have reached an agreement that this agreement has been ratified by the Parliament of Venezuela.

So closing should take place, that is to say the move from Sincor to the mixed company should take place formally I would say between now and the end of the year.

And I would say only at that time when the closing will have taken place that we will be entitled to the compensation.

You also know that this compensation will be paid in kind I think over two years, 2008 and 2009.

And this offer value was something between the [group] value and the economic value.

Jon Rigby, UBS.

Two quick questions, one on the downstream and one on the upstream.

On the downstream I guess there are two moving parts; one is the distillate hydrocracker startup between this year and last year and also I think you know marketing effects between this year and last year.

Is it possible you could quantify for me those two effects, I think one is negative, one is positive.

And the second is just are you able to give some kind of outlook about what is likely to be (technical difficulty) between now and the end of the year with a fair wind, nothing problematic cropping up between now and the 31st of December?

Okay, the DHC that should take place?

Yes.

Concerning the DHC for 2007 I think the cash that has been bought by this new plant should be about $150 million.

It is what we expect over (inaudible) year if we finish the year in good conditions.

Okay.

The marketing in the third quarter, you know that we do not report our marketing results.

I think that our marketing results globally speaking in Europe was slightly higher than in the second quarter especially because the situation has improved in some countries such as Germany and the UK.

Having said that these results were lower than they were in the third quarter 2006.

That was globally speaking relatively good in Europe.

Concerning now the decision that should take place between now and the end of the year, I think [ushon] and (inaudible) should be launched before the end of the year.

And by the way, this project has been already internally approved by the (inaudible) partners.

As to Brass LNG decision, I think it should be taken somewhere in 2008.

I think it is too difficult to be more precise now.

Okay.

That's cool.

Thank you very much.

Mark Gilman, The Benchmark Company.

Robert, good afternoon.

Just a couple of things if I could, please.

It appears that the tax rate on the downstream refining and marketing business in the third quarter was particularly low.

Is there any specific explanation for that?

Yes, in fact what is low or high is the ratio of the net operating loss, the net operating profit divided by the operating profit.

And this is fundamentally due to the fact that the wait of our trading profits was higher in the third quarter, especially because of the reduction of the refining profit.

The other point is that our share of equity profits, the reduction of our share of equity profit especially in Cepsa was lower than the average of our downstream profits.

So this is the way we can explain, you are right to say that is relatively high ratio net operating income divided by operating income.

So it is a way of trading that as a lower tax rate plus the impact of our share in the profits of Cepsa.

Robert, staying with the downstream for just a moment, it appears particularly over recent quarters the performance of the downstream business relative to the environment in place, has been fairly significantly disappointing.

And I was wondering if you would agree with that and whether you believe that frequent turnarounds, turnarounds such as the one [ganferbil] which extend well beyond the time period initially intended.

Help to explain what has been the somewhat chronically weak performance in this segment.

Compared to the second quarter it is clear that the refining margins were lower, and I would say that our downstream results decreased like all the downstream results of the other when I make a comparison and I did that for the Board.

I think we are positioned that these comparable and in most cases much better than it is for our peers.

The level of turnaround was qualitatively good.

(inaudible) your point was maybe a little bit disappointed, these are conversion margins, and it is clearly has had negative impact on the profit.

What can I say -- last point that we have to keep in mind, finally, if I take the third quarter, the profitability of our downstream operations on an annualized basis is I think something by memory 19%, which is not so bad.

In I would say a moderate environment; now it is clear that it is not the 25%, 30% that we had before but remember that in the past three or four years ago we would have been very happy with that.

It is clear though I think globally speaking in the third quarter our refinery worked pretty well.

I guess that in fact was part of my point in terms of margins not being captured.

Just one other upstream related question.

I believe in response to a prior question you indicated that the Sincor compensation would be between book value and fair market value.

Do (inaudible) have the wrong number for the book value of your investment in Sincor?

No, quite frankly, the book value I think for our 47% was something like $2 billion, more or less for our 47%.

And our stake will be reduced from 47 to 30%, that is to say the book value of this 17% you can make an easy division.

And as to the level of your indemnity, I cannot speak of that.

Thank you, Robert.

Nicole Decker, Bear Stearns.

A couple questions on the upstream and then one on the downstream.

The production at Nkossa seems to be ramping up slowly.

If I have done the calculation right it doesn't look like production has risen much from the beginning of third quarter, so maybe you could comment on that.

Secondly, you've added to your position in the Gulf of Mexico.

Just wondering what you are looking at and how that program might evolve.

And then following through on the previous question and refining, would you just talk about the status of production at your refineries, what is down and what is expected to be down in the fourth quarter?

You mean for (inaudible) for the fourth quarter, oh, I think just we should have in mind for the fourth quarter we should partial shutdown the refinery of Rosa, in the south of France.

And in the third quarter we had a shutdown in our Lindsey refinery in the UK and a partial shutdown in our Normandy refinery.

But globally speaking I think that the level of shutdowns should be lower in the fourth quarter than in the third quarter.

Then you asked a question concerning our position in the Gulf of Mexico.

I think as you are aware, we took some additional blocks.

Our strategy is to continue even if up to now on average we have not been very successful.

We think that year after year we have, I would say we have improved (inaudible) ability intrapipe subsea and our geologists convince us that it was justified to continue to explore and to take additional blocks.

I think with this we followed them and we see really we succeeded in improving to have a better understanding of the subsea.

Concerning the impact of Nkossa recovery you said it was not really visible, Nkossa in fact you have to know that we have 53%.

And that we have raised up in August something like one-third of the production capacity of (inaudible) that is to say 20,000 barrels per day.

In fact 20,000 barrels per day is for the totality of the field, and we are 53% of the 50,000 barrels per day.

So this is why the impact of the recovery of Nkossa and was not very visible.

Thank you, Robert.

Now just getting back on the Gulf of Mexico, what activity is occurring there now?

What activity in the Gulf of Mexico?

I think that you remember we have production.

Then we have an interest in the field of Tahiti where the production should start I think in 2009.

And now we have a lot of seismic in order to prepare for the drilling activities on our permits.

Colin Smith, Dresdner.

I was reminded recently that the last production guidance that Total gave was [4.5] to 2% versus 2006.

I think you mentioned your range of 1% to 2%.

Can you just presumably with oil prices where they are, are you suggesting that these may be more like 1% for the year?

That is one question.

The second question is you mentioned a summary and outlook that you are looking at certain development projects with regard to your refining.

(technical difficulty) presumably that you buy a refinery; I think you've been linked in the press with refining capacity in Algeria?

No, no, no, it is true that Algeria once (inaudible) to set up a new refinery, and we looked at that project but we decided not to participate to this project.

The project of Jubail is the one because it should be a full converting refinery with dedicated supply from one of two fields.

And as a consequence of that the economics of this refinery would be fundamentally linked to the differential of price between (inaudible) light and (inaudible) heavy.

And so which is totally different story.

And it will be also an exported refinery to export and as far as (inaudible) there is a project Algeria (inaudible) its refinery it was an inland refinery.

So I think it is a project that is totally different.

So what other projects are there in mind besides Jubail?

As far as we are concerned, Jubail is the only project of refinery that we have in addition to that we have a project for a coker in Port Arthur.

Maybe in Europe we will be led in the coming years to build another one or two conversion plants.

And that is all except that maybe we will have also to adapt our portfolio of assets.

But that is all.

Concerning now the guidance for 2007, it shows that we said that our production growth should be something between 1 to 2% depending in fact on the assumption of oil price.

Of course it is clear that as we are now with (technical difficulty) per barrel, we should probably closer to 1% than 2% because of the production showing contract effect.

Which by the way this type of price relatively limited something like 2000 barrels per day per dollar per barrel.

Also that is the bottom line and the impact should be extremely strong.

Okay.

Thanks.

Lydia Rainforth, Lehman Brothers.

Good afternoon, Robert.

(multiple speakers) a couple of questions if I could.

The first one is on Nigeria and I was wondering given the restructuring that we are seeing within MPC has there been any impact on the project plans there in the area.

And I'm thinking particularly in the time it takes to sanction the projects like (inaudible) and Brass LNG.

And then secondly I know maybe (technical difficulty) but could you give us just the outlook for reserve replacement and I'm thinking particularly here about what a sort of $90 a year in oil price would mean for reserves replacement for the [PSE] side of things.

Concerning the reserve replacement side, I think it is something that we will disclose at the beginning of next year because there will be many things first we still have to know the results of our last exploration activities.

There will be the consequences on the Sincor migration and of our reduction of interest.

There will be also by the way the (inaudible)impact that is both for the production and for the reserves.

So I think due to all these reasons we will come back to you at the beginning of next year and you also know by the way that the work of evaluation of the reserves is (inaudible) which is very sensitive due to several (inaudible).

-- that this was I would say the negative impact; positive being exploration discoveries.

Another point that would be difficult to answer and that makes even more difficult to answer your question now is what will be the consequences on the existing fields of the type of contract we have now.

And it is clear that this should enable us to enlarge the reserves.

Having said that, I'm not sure that it will be foreseeable to review everything because it is a huge work, in fact to a integrate new assumptions in terms of oil price.

Concerning the restructuring of an [NMPC] and the assumption of [ushon] but we are still expecting a sanction to be taken before the end of the year, and we have to wait.

We are confident, we are still some talks with [NMPC] with minister of (inaudible) but up to now we are still waiting but we are expecting assumption to be taken for [ushon] before the end of the year.

That's great.

Thank you.

(inaudible) from [LLC]

This is [Joe Tovey].

I was rather (technical difficulty)

Excuse me.

The line was cut.

Is this better?

I don't hear anything, any.

Do you hear me?

Yes, I can hear you clearly.

Is this better?

Yes, it is.

Thank you.

I was wondering about two things.

Number one, we are seeing that in Europe much of the previous investment in gasoline capacity in the refineries is in fact surplus to the current European market, it used to therefore going to the United States.

Is this a trend that you anticipate will continue?

Do you anticipate this will change over your refinery outturn over the longer run and your refinery capacity?

How long will it take to make the adjustments for your to Total.

I think that this flow of product export of gasoline from Europe to the US will continue.

And in fact, globally speaking the European refining tool is designed to take into account not only the possibility by the way to export gasoline in to the US but to also (technical difficulty) diesel oil from Russia.

Which means that suppose that tomorrow morning we didn't have the possibility to export gasoline to the USA or to somewhere else, we would have to adjust our refining capacities.

So I think this will continue.

One question is now what could be the impact on the demand of gasoline in diesel oil of this type of price we have now $100 per barrel.

The answer is not easy.

Remember at the beginning of the 80's we had something like 40, $44 per barrel, which is the equivalent of $85 to $90 per barrel.

But with the weight of LNG into GDP that was about double of what it is now.

This is why, by the way, we have seen great capability of the economies of the Western economies to absorb this pretty strong increase in the oil price.

So up 70, 80 I think more or less everything was okay -- okay difficult but it was accepted by the Western economies.

Now if we are at 100 and over 100 I think that we should start some consequences on the evolution of the demand.

I don't think this should be very big impact if we remain in the range of 80 but there will be some clearly.

If we have to adjust, and I speak not for Total but for the oil industry refining capacity, I don't think it should be an issue.

But we have to wait and see what would be the consequences on the market.

Thank you.

I'm afraid I did not quite express my question as clearly as I should have.

I was wondering as to whether part of Total's expenditures for refineries and its (technical difficulty) refinery configuration is because Total has a view that the gasoline component worldwide will decline and that therefore its refinery configuration should be more geared to diesel and that part of the market rather than to gasoline.

And that if that is part of the reason for the capital expenditures and the change in Total's refinery configuration.

No, I don't think that this should lead us to some significant changes in our refinery.

By the way, we continue to have an increase of the diesel market in Europe.

So I think again just for the future but it is not for tomorrow morning, we may be led to build additional conversion in order to produce a little bit more of diesel out of diesel oil.

But it is not where we are now, so I think up to now I do not expect any significant changes in our CapEx in our refining tool in Europe.

Dave Thomas, Citigroup.

A couple of questions, please.

Firstly on West Africa, could you give some advice on what the timeline is presently for deciding on block 32 Angola developments?

And secondly on Dolphin in Qatar, I think there is some reports of a high condensate yield in that field, and I wonder if you could comment around that and give some indication of the possibly proved probability from that project as a response to that.

Concerning Dolphin, I think as a production of condensate should be something like 20% of the production.

And these liquids are sold on the market at the market price, which is good because price of gas is relatively low but of course production costs are also extremely low.

And I think that not taking into account all these elements we manage to have pretty good profitability for the Dolphin development.

And now the question was concerning the [fid] for the block 32 in Angola.

We have in mind something like 2009, and now this is very tentative and we could expect the production starting up maybe in 2012, something like that.

Thanks, Robert.

Neill Morton, MF Global.

Just a follow-up on refining investments.

Can you perhaps talk about your plans in India?

I thought you were perhaps considering a refinery there.

In India we have some studies, and that is all.

I think it is important before (inaudible) something to have better knowledge of the market.

(inaudible) difficulty by the way when you decide to build a new refinery now is a supply, is long-term supply of this refinery.

We are no longer with the company coming from the producing company with a different -- with the group that we are (inaudible) in order to make some studies.

So this is just where we are now.

It is a question of study but with some difficulties.

So I think it is not -- we sign a memorandum of understanding but that is all.

I cannot say more now, quite frankly.

It is more a question of studying.

Okay.

Perhaps a more general question.

Back in September you (technical difficulty) your presentation painted a picture a very strong company, and you have day-to-day the best metrics amongst the majors and yet your share price this year has lagged the other large cap majors by some margin.

It is catching up a little bit today but I just wondered if the executive committee has perhaps considered more radical ways (technical difficulty) this underperformance or are you just happy to let fundamentals take their course?

Sometimes in the oil industry you have to wait.

Concerning our underperformance, I think that you probably understand better than I do the market.

Maybe recently our share price has been affected by shareholders that decided to shed some chairs because we are in Myanmar, I don't know because we are in Iran.

Fundamentally I think the other point is that in fact we were the last by the way to publish our results.

And maybe there were also some uncertainties on our results.

Quite frankly I am very confident with our performance.

In terms of, I would say hydrocarbon price [validation], [prediction] cost, preparation of the future.

So I am convinced that at the end of the day maybe we are seeing today the start of that, that the market or the operators so our shareholders or the investors will understand all the future of the company which to me seems relatively unique compared to the other majors.

I think that we are probably the only company that has now in its portfolio of activity enough reserves to be confident to be able to grow the production, not only between now and 2010, but I see also for almost all the next decade.

And given the evolution of the share price, given also relatively the fact that we will be always relatively cautious, you know that up to now all the investment that we have decided should fly with $50 per barrel, maybe more cash would require $60 per barrel.

But for all the others this would be able to deliver a pretty good economy with something between 40 to 50.

And I think that if I take marginally all the projects that we are in front of first, we should be able to launch them with good economics in oil prices.

That may appear to be relatively cheap compared to what we see now.

So clearly I am very confident that we are probably the best future compared to our peers, and it is clear that one time or another this will be recognized by the market.

Okay.

That's fine.

Thank you very much.

We have no further questions.

Okay, so yes, do you want to say something?

Go ahead.

I just would to like to thank you for being with us today.

Thank you.

Ladies and gentlemen, this concludes the Total third quarter 2007 results.

Thank you all for attending.

You may now disconnect.