Our production growth depends on the delivery of our major development projects.

The Group’s targeted production growth relies heavily on the successful execution of its major development projects, which are complex and capital-intensive. These major projects are subject to a number of challenges, including:

Poor delivery of any major project that underpins production or production growth could adversely affect the Group’s financial performance. In addition, many of TOTAL’s projects under developments are larger and more complex than past major projects, which increases the potential execution risk.

Many of our projects are conducted by equity affiliates. This may reduce our degree of control, as well as our ability to identify and manage risks.

A significant and growing number of the Group’s projects are conducted by equity affiliates. In cases where a company in which the Group holds an interest is not the operator, it may have limited influence over, and control of, the behavior, performance and costs of the partnership, its ability to manage risks may be limited and it may, nevertheless, be pursued by regulators or claimants in the event of an incident. Additionally, the partners of the Group may not be able to meet their financial or other obligations to the projects, which may threaten the viability of a given project, and they may not have the financial capacity to fully indemnify the Group in the event of an incident.

We have significant production and reserves located in politically, economically and socially unstable areas, where the likelihood of material disruption of our operations is relatively high.

A significant portion of ourTOTAL’s oil and gas production occursand reserves is located in unstable regions aroundcountries outside of the world, most significantly Africa, but also the Middle East, Asia-PacificOrganisation for Economic Co-operation and South America. Approximately 28%, 24%, 10% and 8%, respectively, of our 2011 combined liquids and gas production came from these four regions.Development (OECD). In recent years, a number of thethese countries in these regions have experienced varying degrees of one or more of the following: economic instability, political volatility, civil war, violent conflict, social unrest and social unrest.actions of terrorist groups. Any of these conditions alone or in combination could disrupt the Group’s operations in any of these regions, causing substantial declines in production. In addition, uncertainties surrounding enforcement of contractual rights in these regions may adversely impact the Group’s results. In Africa, which represented 29% of the Group’s 2013 combined liquids and gas production, certain of the countries in which we havethe Group has production have recently suffered from some of these conditions, including Nigeria, where we had in 2011 our second highest hydrocarbonwhich has been the main contributing country to the Group’s production of hydrocarbons since 2012, and Libya.

The Middle East, in generalwhich represented 23% of the Group’s 2013 combined liquids and gas production, has recently suffered increased political volatility in connection with violent conflict and social unrest. A numberunrest, including Syria, where European Union (EU) and U.S. economic sanctions have prohibited TOTAL from producing oil

Ethical misconduct or breaches of applicable laws by our employees could expose us to criminal and civil penalties and be damaging to our reputation and shareholder value.

The Code of Conduct of the Group, which applies to all of its employees, defines the Group’s commitment to integrity, compliance with all applicable legal requirements, high ethical standards and the behaviors and actions the Group expects of the businesses and people of the Group wherever it operates(foradditional information on the Group’s Code of Conduct, see “Item 4. Other Matters — Fair operating practices”). Ethical misconduct or non-compliance with applicable laws and regulations, including non-compliance with anti-bribery and anticorruption laws, by TOTAL, its partners, agents or others that act on the Group’s behalf, could expose TOTAL and its employees to criminal and civil penalties and could be damaging to TOTAL’s reputation and shareholder value. In addition, ethical misconduct or non-compliance with applicable law may lead the competent authorities to impose other measures, such as the appointment of an independent monitor in charge of reviewing the Group’s compliance and internal control procedures and, if need be, recommending improvements of such procedures. Regarding this point, refer to “Item 8. Legal or arbitration proceedings — Iran” for an overview of the settlements between TOTAL, the SEC and the Department of Justice (DoJ) providing for the appointment of an independent monitor, who was appointed in late 2013.

We are exposed to risks regardingrelated to the safety and security of our operations.

TOTAL engages in a broad scope of activities, which include, in particular, drilling, oil and gas production, processing, transportation, refining and petrochemical activities, storage and distribution of petroleum products, specialty chemicals and production of base chemical and specialty products, andsolar energy. These activities involve a wide range of operational risks. Among these risks, are those ofsuch as explosions, fires, accidents, equipment failures, or leakage of toxic products, or emissions or discharges into the air, water or soil, includingand related environmental and health risks. We also face risks, once production is discontinued, because our activities require environmental site remediation. In the transportation area, the type of risk depends not only on the hazardous nature of the products transported, but also on the transportation methods used (mainly pipelines, maritime, river-maritime, rail, road)road and pipelines), the volumes involved and the sensitivity of the regions through which the transport passes (quality of infrastructure, population density, environmental considerations). Most of the Group’s activities will also eventually require environmental site remediation, closure and decommissioning after production is discontinued.

The industrial events that could have the most significant impact are primarily: a major industrial accident (fire, explosion, leakage of highly toxic products); and large-scale accidental pollution or pollution at a particularly sensitive site.

Each of the described risks corresponds to events that could potentially harm human health, cause death, damage property, disrupt business activities or cause environmental damage. The Group’s employees, contractors, residents living near the facilities or customers can suffer injuries. Property damage can involve the facilities of the Group as well as the property of third parties. The seriousness of the consequences of these events varies according to the vulnerability of the people, ecosystems and business activities impacted, on the one hand, and the number of people in the impact area and the location of the ecosystems and business activities in relation to TOTAL’s facilities or to the trajectory of the products after the event, on the other hand.

With respect to third partythird-party providers of goods and services, the amount and nature of liabilitiesthe liability assumed by the third party depends on the context and may be limited by contract. With respect to their customers, the Group’s customers, TOTAL seeks toentities ensure that itstheir products meet applicable specifications and that TOTAL abidesabide by all applicable consumer protection laws. Failure to do so could lead to personal injury, environmental harm regulatory violations and loss of customers, andwhich could negatively impact ourthe Group’s results of operations, financial conditionposition and reputation.

Crisis management systems are necessary to respond effectively to emergencies and to avoid potential disruptions in our business and operations.

TOTAL has crisis management plans in place to deal with emergencies. However, these plans cannot exclude the risk that the Group’s business and operations may be severely disrupted in a crisis situation or ensure the absence of impacts on third parties or the environment. TOTAL also has implemented business continuity plans in order to continue or resume operations following a shutdown or incident. An inability to restore or replace critical capacity in a timely manner could prolong the impact of any disruption and could have a material adverse effect on the Group’s business and operations. For more information on the Group’s crisis management systems, see“Item 4. Other Matters — Management and monitoring of industrial and environmental risks”.

While our insurance coverage is in line with industry practice, we are not insured against all possible risks.

We maintainThe Group maintains insurance to protect usitself against the risk of damage to Group property and/or business disruptioninterruption to ourthe Group’s main refining and petrochemical sites. In addition, wethe Group also maintainmaintains worldwide third-party liability insurance

Management and monitoring of industrial and environmental risks — Health, safety and environmental regulations that increase our operating costs, affect product sales and reduce profitability. Furthermore, our business operates— European Union — CO₂ emission allowances”.

Finally, TOTAL’s businesses operate in varied locales where the potential physical impacts of climate change, including changes in weather patterns, are highly uncertain and may adversely impact the results of ourthe Group’s operations.

Our operations throughout the developing world are subject to intervention by various governments, which could have an adverse effect on our results of operations.

We have significant exploration and production, and in some cases refining, marketing or chemicals operations, in developing countries whose governmental and regulatory framework is subject to unexpected change and where the enforcement of contractual rights is uncertain. In addition, our exploration and production activity in such countries is often done in conjunction with state-owned entities, for example as part of a joint venture, where the state has a significant degree of control. In recent years, in various regions globally, we have seen governments and state-owned enterprises exercising greater authority and imposing more stringent conditions on companies pursuing exploration and production activities in their respective countries, increasing the costs and uncertainties of our business operations, which is a trend we expect to

or enhancementexpansion of Iran’s ability to develop petroleum resources located in Iran, or (ii) has a fair market value of $250,000 or more or that, during a 12-month period, has an aggregate fair market value of $1 million or more, and that could directly and significantly contribute to the maintenance or expansion of Iran’s domestic production of petrochemical products. TOTAL does not conduct activities in Iran that couldit believes would be sanctionable under Executive Order 13590, and13590. In any event, there is no provision in Executive Order 13590 that modifies the aforementioned “Special Rule”. In addition,, and the U.S. State Department has publishedissued guidance that states the completion of existing contracts is not sanctionable under Executive Order 13590.

On July 30, 2012, President Obama issued Executive Order 13622, which authorized sanctions for, amongst other activities, (i) knowingly, on or after July 30, 2012, engaging in a significant transaction for the purchase or acquisition of petroleum, petroleum products or petrochemical products from Iran, or (ii) materially assisting, sponsoring or providing financial, material, or technological support for, or goods or services in support of, the National Iranian Oil Company, the Naftiran Intertrade Company (“NICO”), or the Central Bank of Iran. There is no provision in Executive Order 13622 that modifies the aforementioned “Special Rule”. In addition, Executive Order 13622 contains an exception for the Shah Deniz gas field pipeline project, in which TOTAL (10%) and NICO (10%) participate, to supply natural gas from the Shah Deniz gas field in Azerbaijan to Europe and Turkey. This Executive Order was amended and expanded by Executive Order 13645 (discussed in further detail below), in order to capture as potentially sanctionable conduct a wider range of petroleum-related activities. TOTAL does not conduct activities that it believes would be sanctionable under Executive Order 13622 as amended by Executive Order 13645.

On August 10, 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRA”), which, amongst other things, amended ISA and CISADA. ITRA, like CISADA before it, expanded both the list of activities with Iran that could lead to sanctions and the list of sanctions available. Amongst other things, ITRA authorized sanctions for (i) the provision to Iran of goods, services, technology, information or support above a certain market value that could directly and significantly facilitate the maintenance or expansion of Iran’s domestic production of refined petroleum products, including any direct and significant assistance with the construction, modernization, or repair of petroleum refineries or infrastructure directly associated with petroleum refineries, (ii) participation in a joint venture established on or after January 1, 2002 with respect to the development of petroleum resources outside of Iran where either the Government of Iran is a substantial partner or investor or where the joint venture could enhance Iran’s ability to develop petroleum resources in Iran, and (iii) owning, operating, controlling or insuring a vessel used to transport crude oil from Iran to another country. ITRA also contains an exception for the Shah Deniz gas field project. TOTAL does not conduct activities that it believes would be sanctionable under ITRA.

ITRA also added Section 13(r) to the Securities Exchange Act of 1934, as amended (“Exchange Act”), which requires TOTAL to disclose whether it or any of its affiliates has engaged during the calendar year in certain Iran-related activities, including those targeted under ISA, without regard to whether such activities are sanctionable under ISA, and any transaction or dealing with the Government of Iran that is not conducted pursuant to a specific authorization of the U.S. government(see “Item 4. Other Matters — Iran”). For any annual report that contains responsive Section 13(r) disclosure, an “Iran Notice” is separately filed with the United States Securities and Exchange Commission (“SEC”). The SEC must notify the President and U.S. Congress, and the President must initiate an investigation and make a sanctions determination within 180 days after initiating the investigation.

measures regarding Syria. Since early December 2011, the Group has ceased its activities that contribute to oil and gas production in Syria.

TheIn addition, the U.S. Treasury Department’s Office of Foreign Assets Control (referred to as “OFAC”) administers and enforces broad and comprehensive economic sanctions programs, as well as sanctions thatsome of which are based on the United Nations Security Council resolutions referred to above, against targeted foreign countries, territories, entities and that target individuals (including those engaged in activities related to terrorism or the proliferation of weapons proliferation in Iran, usingof mass destruction and other threats to the blockingnational security, foreign policy or economy of assets and trade restrictions.the United States). The activities that are restricted depend on the sanctions program and targeted country or parties, and

TOTAL S.A., a Frenchsociété anonyme (limited company) incorporated in France on March 28, 1924, together with its subsidiaries and affiliates, is the fifth largest publicly-traded integrated international oil and gas company in the world⁽¹⁾.

TOTAL’s worldwide operations in 20112013 were conducted through three business segments: Upstream, Downstream,Refining & Chemicals and Chemicals.Marketing & Services. The table below gives

Exploration and development

TOTAL’s Upstream segment aims at continuing to combine long-term growth and profitability at the level of the best inactors of the industry.

TOTAL evaluates exploration opportunities based on a variety of geological, technical, political, and economic factors (including taxes and license terms), environmental and societal factors, and on projected oil and gas prices. Discoveries of new fields and extensions of existing fields accounted for approximately 76% of the 2,037have brought an additional 2,260 Mboe added to the Upstream segment’s proved reserves during the three-year3-year period ended December 31,

liquids and bitumen) represented approximately 47% of these reserves and natural gas the remaining 53%. These reserves were located in Europe (mainly in Norway and the United Kingdom), in Africa (mainly in Angola, Gabon, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, Argentina and Venezuela), in the Middle East (mainly in Qatar, the United Arab Emirates and Yemen), and in Asia (mainly in Australia, Kazakhstan and Russia).

As of December 31, 2012, TOTAL’s combined proved reserves of oil and gas were 11,368 Mboe (51% of which were proved developed reserves). Liquids (crude oil, condensates, natural gas liquids and bitumen) represented approximately 50% of these reserves and natural gas the remaining 50%. These reserves were located in Europe (mainly in Norway and the United Kingdom), in Africa (mainly in Angola, Gabon, Libya, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, Argentina and Venezuela), in the Middle East (mainly in Qatar, the United Arab Emirates and Yemen), and in Asia (mainly in Australia, Kazakhstan and Russia).

As of December 31, 2011, TOTAL’s combined proved reserves of oil and gas were 11,423 Mboe (53% of which were proved developed reserves). Liquids (crude oil, condensates, natural gas liquids and bitumen) represented approximately 51% of these reserves and natural gas the remaining 49%. These reserves were located in Europe (mainly in Italy, Norway and the United Kingdom), in Africa (mainly in Angola, Gabon, Libya, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, the United States, Argentina and Venezuela), in the Middle East (mainly in Qatar, the United Arab Emirates and Yemen), and in Asia (mainly in Australia, Indonesia, Kazakhstan and Russia).

As of December 31, 2010, TOTAL’s combined proved reserves of oil and gas were 10,695 Mboe (53% of which were proved developed reserves). Liquids (crude oil, natural gas liquids and bitumen) represented approximately 56% of these reserves and natural gas the remaining 44%. These reserves were located in Europe (mainly in Norway