Upstream segment results
Market conditions were less favorable in 2014 given the fall in oil prices in the second half. The average realized price of liquids fell by 13% and the average realized price of gas by 8% compared to 2013.
In 2014, hydrocarbon production was 2,146 kboe / d, a decrease of 7% from 2013, due to the following:
- 6% essentially for the expiration of the ADCO license in the United Arab Emirates,
- 2% for natural decline and higher maintenance in 2014, notably in the first half, partially offset by production growth in the Utica in the United States, and
- 1% for production growth from start-ups, essentially CLOV in Angola. In 2014, excluding ADCO, hydrocarbon production was virtually stable compared to 2013.
Proven hydrocarbon reserves based on SEC rules (based on Brent at 101.3 $ / b) were 11,523 Mboe at December 31, 2014. Based on the 2014 average rate of production, the reserve life is more than thirteen years.
The proved reserve replacement rate (1), based on SEC rules, was 100%.
The organic proved reserve replacement rate (2) was 125%.
At year-end 2014, TOTAL had a solid and diversified portfolio of proved and probable reserves (3) representing more than twenty years of reserve life based on the 2014 average production rate, and resources (4) representing about fifty years of production.
Adjusted net operating income from the Upstream segment in 2014 was $10,504 million compared to $12,450 million in 2013, a decrease of 16%, which was due essentially to the decrease in the average realized price of hydrocarbons. The effective tax rate for the Upstream segment was 57.1% in 2014, compared to 60.0% in 2013. The lower rate reflects mainly the benefit of tax allowances in the United Kingdom in the second quarter 2014.
Technical costs for consolidated subsidiaries, calculated in accordance with ASC 932 (5), were 28.3 $ / boe in 2014 compared to 26.1 $ / boe in 2013, an increase due principally to the increase in depreciation of fixed assets and the increase in production costs, mainly maintenance costs.
The Return on Average Capital Employed (ROACE (6)) for the Upstream segment was 10.7% in 2014 compared to 13.8% in 2013.
(1) Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments) / production for the period.
(2) The reserve replacement rate in a constant oil price environment of 108.02 $ / b (reference price in 2013), excluding acquisitions and divestments.
(3) Limited to proved and probable reserves covered by Exploration & Production contracts on fields that have been drilled and for which technical studies have demonstrated economic development in a 100 $ / b Brent environment, including projects developed by mining.
(4) Proved and probable reserves plus contingent resources (potential average recoverable reserves from known accumulations – Society of Petroleum Engineers - 03 / 07).
(5) FASB Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas.
(6) Based on adjusted net operating income and average capital employed at replacement cost.