Total S.A. SWOT & PESTLE Analysis

Strength

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Weakness

1. Divestments of oil sands assets in Canada due to concerns of climate change and profitability impact: Total had majorly banked on its oil sands project in early 2000’s as future growth drivers post 2010. The company invested in Canada’s oil sands in partnership with Houston-based ConocoPhillips. However Total S.A’s share of the production from the project was around 12,000 b/d as of 2015 which was far less than the 300,000 b/d which was initially envisioned. The company has reduced its stake in the project by selling 10% stake to its partner Suncor Energy for a discounted price. The low oil price environment, climate change concerns and better alternate investments led to the divestment from the above project. It also caused the company significant losses and reputational loss in Canada as it backed out of the project.

2. Payment of penalties for implication in lawsuits in United States and France over bribery charges and manipulation of natural gas prices: Total S.A has been implicated in United States in 2013 over bribery charges related to Iranian officials for gaining access and contract to Iranian gas fields. It had to pay $398 million in penalties and repayment of illegal gains. In another case, Total was accused of circumventing the United Nations oil-for-food program in Iraq during the sanctions and fined €750,000 by the French courts. The U.S. regulators also alleged that Total has manipulated natural gas prices June 2009 and June 2012. These allegations and penalties have caused financial and reputational losses to Total.

Opportunity

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Threat

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Political

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Economic

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Social

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Technological

1. Strong investments in R&D for technology innovation: Spending on research and development is an indicator of an organizations focus on innovation and technology development. R&S investments has helped Total optimize its production process to reduce costs while maintaining its technological leadership. Total Solar in is pursuing R&D investments in the photovoltaic field though industrial and academic alliances. The company has also intends to dedicate 10% of its R&D budget in carbon capture technologies and energy storage mechanisms. The company has also entered into collaborative R&D projects for the development of bio-sourced molecules with various academic partners Total has forecasted USD 6.7 billion in R&D spend between 2016 and 2020.

2. 2. Leveraging supercomputing for exploration and field management decision making: Big-data analytics have increased the quality and volume of seismic data available to Exploration & Production operators. Total has significantly invested in its analytical capabilities and its Total's supercomputer Pangea is the most powerful supercomputer in the oil and gas industry with a commuting power of more than 80,000 laptops combined. The company uses it as a decision-support tool used for exploration and field management which helps in improving accuracy of subsurface imaging, optimizing production and increasing efficiency.

Legal

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Environmental

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