Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions- request for relief from continuous disclosure, certification, audit committee, corporate governance and insider reporting requirements to issuers of guaranteed medium term notes - continuous disclosure of French parent credit supporter will be provided - request for relief to be eligible to file a short form prospectus and from certain prospectus incorporation by reference and earnings coverage ratio disclosure requirements - relief granted subject to conditions.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations.

National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

National Instrument 52-110 Audit Committees.

National Instrument 58-101 Disclosure of Corporate Governance Practices.

National Instrument 44-101 Short Form Prospectus Distributions.

National Instrument 44-102 Shelf Distributions.

Citation: Total Capital S.A., Re, 2010 ABASC 269

June 16, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

TOTAL CAPITAL S.A. (Total Capital)

AND TOTAL CAPITAL CANADA LTD.

(Total Capital Canada and,

together with Total Capital, the Filers)

DECISION

Background

The local securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting:

(a) the Filers from the requirement in subparagraph 2.4(1)(a) of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) that Total S.A. (Total) provide full and unconditional credit support (as defined in National Instrument 41-101 General Prospectus Requirements) for the securities distributed and the requirement in subparagraph 2.4(1)(b)(ii) of NI 44-101 that Total be a U.S. credit supporter and Total Capital from the requirement in subparagraph 2.4(1)(b)(ii) that Total Capital be incorporated or organized under the laws of Canada or a jurisdiction of Canada (the Eligibility Requirements);

(b) the Filers from the requirement in Item 6 of Form 44-101F1 Short Form Prospectus (44-101F1) to disclose earnings coverage ratios of such issuers in a prospectus (the Earnings Coverage Disclosure Requirement);

(c) the Filers from the requirement in section 8.4 of National Instrument 44-102 Shelf Distributions (NI 44-102) that an issuer distributing securities by way of a medium term note program calculate updated earnings coverage ratios of such issuer each time the issuer prepares interim or audited annual financial statements (the Earnings Coverage Update Requirement);

(d) the Filers from the requirement in Item 12.1(2) of 44-101F1 to incorporate by reference certain U.S. filings of Total, as credit supporter, into a prospectus under the Current Offering (as hereinafter defined) or any Future Offering (as hereinafter defined);

(e) the Filers from the requirement in Item 11.1 of 44-101F1 to incorporate by reference into a prospectus the Canadian disclosure documents specified in Item 11.1 of 44-101F1 (the Canadian Disclosure Documents) and from the requirement in Item 11.2 of 44-101F1 to incorporate future documents of the type prescribed by Item 11.1 of 44-101F1 (collectively, with the relief sought in (d) above, the Incorporation by Reference Requirements);

(f) the Filers from the requirements of section 3.1 and section 3.2 of NI 44-101, to the extent such sections would deem the Canadian Disclosure Documents required to be incorporated pursuant to the Incorporation by Reference Requirements, or any Non-Essential 6-K (as hereinafter defined) or Non-Incorporated Exhibits (as hereinafter defined), to be incorporated by reference in any prospectus under the Current Offering or any Future Offering (the Deemed Incorporation by Reference Requirements);

(g) the Filers from the requirements of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) (the Continuous Disclosure Requirements);

(h) the Filers from the requirements of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) (the Certification Requirement);

(i) the Filers from the requirements of National Instrument 52-110 Audit Committees (NI 52-110) (the Audit Committee Requirements);

(j) the Filers from the requirements of National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) (the Corporate Governance Requirements); and

(k) insiders of the Filers from the insider reporting requirement (as defined in National Instrument 14-101 Definitions) (the Insider Reporting Requirements).

Furthermore, the Decision Makers have received a request from the Filers for a decision that the application and this decision be kept confidential and not be made public until the earlier of:

(a) the date on which the Filers publicly announce the Current Offering;

(b) the date on which the Filers obtain a receipt for the preliminary MTN Prospectus filed under NI 44-101 and NI 44-102;

(c) the date the Filers advise the principal regulator that there is no longer any need for the application and this decision to remain confidential; and

(d) the date that is 90 days after the date of this decision (the Confidentiality Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for the application;

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined in this decision.

Representations

This decision is based on the following facts represented by the Filers:

Total

1. Total is a société anonyme incorporated under the laws of France. The head office of Total is located in Courbevoie, France.

2. Total has ordinary stock listed on the Euronext Paris under the stock symbol "FP" and has American Depositary Receipts (ADRs) listed on the New York Stock Exchange (NYSE) under the stock symbol "TOT". Total is in compliance with the requirements of the NYSE in respect of making public disclosure of material information on a timely basis. As of December 31, 2009, Total had an authorized share capital of 3,381,921,458 common shares with a par value of €2.50 per share, and an issued share capital of 2,348,422,884 common shares.

3. As at December 31, 2009, Total, as issuer, had approximately U.S. $250 million in debt securities outstanding which relate to securities that are currently outstanding under Total's current medium term note programs in Europe. All of Total's debt securities, including its medium term notes, are rated AA by Standard & Poor's, a division of the McGraw-Hill Companies, Inc. (S&P), with a negative outlook, Aa1 by Moody's Investors Services Limited (Moody's) and AA by Dominion Bond Rating Service Limited (DBRS), with a stable trend, each being an approved rating under NI 44-101 (Approved Rating). Total expects that its debt will continue to receive an Approved Rating.

4. Total is a "SEC issuer" within the meaning of NI 51-102 because the ADRs are registered under section 12 of the Securities Exchange Act of 1934 (the 1934 Act) of the United States of America.

5. Total is subject to the reporting requirements of the 1934 Act. Total has filed, for a period of almost 20 years, all reports required to be filed with the Securities and Exchange Commission (SEC) under the 1934 Act, including annual reports on Form 20-F, quarterly reports on Form 6-K and current reports on Form 6-K (the SEC Filings). Total is in compliance with the requirements of the Securities Act of 1933, as amended, of the United States of America and the 1934 Act.

6. Total is also a "SEC foreign issuer" under National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107). Total's financial statements comply with paragraph 5.1(1)(b) of NI 52-107 as they are prepared in accordance with International Financial Reporting Standards. The audit report applicable to Total's most recently completed financial year also complies with paragraph 5.2(a) of NI 52-107 as such financials have been audited in accordance with U.S. GAAS.

7. Total maintains reporting status in the United States and delivers all disclosure material required by U.S. federal securities laws to be delivered to holders of its securities in the United States. This disclosure material is also available to holders of Total's securities through the SEC's website at www.sec.gov (the SEC Website).

8. In connection with takedowns under debt of Total and Total Capital under prospectuses filed with the SEC, Total is required to file with the SEC a large number of current reports on Form 6-K (the Non-Essential 6-Ks) whose contents are comprised solely of exhibits attaching the form of securities for each such takedown, the consent and opinion of counsel relating thereto and other documentation, all of a non-financial nature, that may be required to be filed with the SEC in connection with such takedowns. The Non-Essential 6-Ks are publicly available on the SEC Website.

9. In addition to the Non-Essential 6-Ks, Total may file as a report on Form 6-K, attach as exhibits to or incorporate by reference into its annual reports on Form 20-F, quarterly reports on Form 6-K, current reports on Form 6-K, definitive proxy or information statements or other continuous disclosure documents filed under the 1934 Act, the following documents which would not be required to be incorporated by reference in a Canadian issuer's prospectus (each, a Non-Incorporated Exhibit):

(a) contracts not made in the ordinary course of business that are material to Total, indemnification and severance agreements, deferred compensation plans, stock unit and stock option plans and other stock option or award plans, and all amendments, supplements and restatements thereto and any underwriting agreements or voting trust agreements of Total and all amendments, supplements and restatements thereto;

(b) plans of acquisition, reorganization, arrangement, liquidation or succession;

(c) articles of incorporation (or instruments corresponding thereto) and by-laws of Total and any amendments or restatements thereof;

(d) instruments defining the rights of security holders, including deposit agreements, rights agreements and any supplements to and amendments or restatements thereof;

(e) charters of committees of the Total board of directors, other than the audit committee charter;

(f) opinions of: (a) legal counsel as to legality of securities being registered in the U.S. indicating whether such securities will, when sold, be legally issued, fully paid and non-assessable and, if debt securities, whether they will be binding obligations of Total; and (b) legal counsel or an independent or public certified accountant, or revenue rulings from the Internal Revenue Service, supporting the description of tax matters and consequences to the shareholders in certain filings of Total;

(g) published reports regarding matters submitted to security holders which are required to be filed with the SEC;

(h) manually signed powers of attorney filed with the SEC if any name is signed to a registration statement or report of Total pursuant to a power of attorney;

(i) indentures and supplemental indentures relating to the issuance of debt securities and forms of certificates and depositary receipts relating to securities of Total excluding any of the foregoing related to the Canadian MTN program;

(j) current reports on Form 6-K of Total, other than current reports on Form 6-K of Total relating to the financial condition of, or disclosing a material change in the affairs of, Total which are filed by Total with the SEC (excluding any exhibit thereto that would otherwise constitute a Non-Incorporated Exhibit); and

(k) codes of ethics that Total voluntarily files as exhibits to its annual report on Form 20-F and also posts on its website.

10. By virtue of the Non-Incorporated Exhibits being filed as reports on Form 6-K or being attached as exhibits or being incorporated by reference into Total's SEC Filings, the Filers will be required to incorporate the Non-Essential 6-Ks and the Non-Incorporated Exhibits into a shelf prospectus under Item 12.1(2) of 44-101F1.

11. In lieu of the Non-Incorporated Exhibits being incorporated by reference into the MTN Prospectus or any prospectuses in connection with Future Offerings, the Filers will file on SEDAR the Non-Incorporated Exhibits, other than Non-Incorporated Exhibits that have previously been filed, as soon as practicable following the filings of such disclosure documents with the SEC and, in any event, prior to the filing of any subsequent prospectus supplement (where applicable) on SEDAR.

12. Total is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States of America, as amended.

Total Capital

13. Total Capital is a société anonyme incorporated under the laws of France. The head office of Total Capital is located in Courbevoie, France.

14. Total Capital is a direct subsidiary of Total. With the exception of six shares of Total Capital that are held by directors of Total Capital, Total beneficially owns all of the issued and outstanding shares of Total Capital. Total Capital is a financing vehicle for the subsidiaries and affiliates of Total (the Total Group) and issues debt securities and commercial paper on behalf of the Total Group.

15. As at December 31, 2009, Total Capital had approximately U.S. $27,932 million in medium term notes outstanding outside of Canada. All of the medium term notes of Total Capital are unconditionally and irrevocably guaranteed as to payment of principal and interest by Total. Subject to the nominal number of shares of Total Capital held by directors of Total Capital, the medium term notes are the only securities of Total Capital that are held by the public. All of Total Capital's long term debt securities, including its medium term notes, are rated AA by S&P, with a negative outlook, Aa1 by Moody's, with a stable outlook and AA by DBRS, each being an Approved Rating. Total Capital expects that its debt securities will continue to receive an Approved Rating.

Total Capital Canada

16. Total Capital Canada is a corporation incorporated under the laws of Alberta. The head office of Total Capital Canada is located in Calgary, Alberta.

17. Total Capital Canada is a direct wholly-owned subsidiary of Total.

18. Total Capital Canada was formed to access the Canadian capital markets to raise funds by the issuance of debt securities.

19. As at December 31, 2009, Total Capital Canada had approximately U.S. $3,093 million in commercial paper outstanding, all of which is unconditionally and irrevocably guaranteed as to payment of principal and interest by Total. The commercial paper is the only security of Total Capital Canada that is held by the public. All of Total Capital Canada's commercial paper is rated R-1 (middle) by DBRS, with a stable trend, A-1+ by S&P and P-1 by Moody's, each being an Approved Rating. Total Capital Canada expects that its commercial paper will continue to receive an Approved Rating.

20. The Filers intend to file a short form base shelf prospectus (the MTN Prospectus) in Canada to qualify for distribution medium term notes (the Notes) pursuant to the procedures set forth in NI 44-101 and NI 44-102 (the Current Offering). The Notes issued by either of Total Capital and Total Capital Canada would be unconditionally guaranteed by Total. All of the Notes issued by the Filers under the Current Offering and any future offerings, including any renewal base shelf prospectuses in relation thereto (a Future Offering) will have received an Approved Rating.

21. With respect to Total Capital and Total Capital Canada, as issuers, Total will be a "credit supporter" within the meaning of NI 51-102 because Total will guarantee the payment of principal and interest under any medium term notes issuable by Total Capital and/or Total Capital Canada. Total Capital and Total Capital Canada will be "credit support issuers" as defined in NI 51-102.

22. The Filers are unable to rely upon the qualification criteria set forth in section 2.4 of NI 44-101 and section 2.4 of NI 44-102 because Total, not having been incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia, is not a "U.S. credit supporter". In addition, Total Capital is not incorporated or organized under the laws of Canada or a jurisdiction of Canada.

23. The Filers are unable to rely upon the exemption for credit support issuers from the application of NI 51-102 contained in section 13.4 of NI 51-102 (the Credit Support Issuer Exemption), since:

(a) Total is not incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia;

(b) neither the terms of the Notes nor any agreement governing the rights of holders of the Notes will expressly entitle holders of Notes to receive payment from Total within 15 days of any failure by Total Capital or Total Capital Canada to make a payment;

(c) Total is not the beneficial owner of all the outstanding voting securities of Total Capital and Total Capital has nominal securities outstanding that are not held by Total or an affiliate of Total; and

(d) the Filers will not file under their SEDAR profiles any Non-Essential 6-Ks of Total, as credit supporter, that comprise part of Total's SEC Filings.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Filers are exempt from the Eligibility Requirements, the Earnings Coverage Disclosure Requirement, the Earnings Coverage Update Requirement, the Incorporation by Reference Requirements and the Deemed Incorporation by Reference Requirements in connection with the MTN Prospectus and any prospectus under a Future Offering, provided that:

(a) the Filers comply with all of the other requirements of NI 44-101 and NI 44-102, except as varied by this Decision or as permitted by NI 44-102;

(b) in respect of the Filers' exemption from the Eligibility Requirements, Total satisfies the conditions in the definition of "U.S. credit supporter" in NI 44-101 other than the condition set forth in paragraph (a) of such definition which requires that Total be incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia;

(c) prior to the filing of the MTN Prospectus and any prospectus in connection with other Future Offerings, Total Capital and Total Capital Canada will each become an electronic filer under National Instrument 13-101 SEDAR and will cause to be filed with applicable securities regulators, in electronic format under the SEDAR profile of each of the Filers, the following documents required to be filed by Total with the SEC under section 13 and section 15(d) of the 1934 Act, at the same time or as soon as practicable after the filing by Total of those documents with the SEC, since its last fiscal year end:

(i) the most recent annual report on Form 20-F of Total filed with the SEC;

(ii) all quarterly reports on Form 6-K of Total filed with the SEC in respect of the financial year following the year that is the subject of the then most recently completed quarter; and

(iii) all current reports on Form 6-K of Total required to be filed with the SEC, excluding any Non-Essential 6-Ks;

(d) the MTN Prospectus and any prospectuses in connection with Future Offerings:

(i) include earnings coverage ratio disclosure for Total in accordance with U.S. requirements;

(ii) incorporate by reference:

A. the most recent annual report on Form 20-F of Total filed with the SEC, excluding any Non-Incorporated Exhibits;

B. all quarterly reports on Form 6-K of Total filed with the SEC, and all current reports on Form 6-K of Total required to be filed with the SEC, in each case, in respect of the financial year following the year that is the subject of the most recent annual report on Form 20-F of Total filed with the SEC, excluding any Non-Essential 6-Ks and Non-Incorporated Exhibits relating to the foregoing; and

C. any material change reports filed by Total Capital or Total Capital Canada;

(iii) incorporate by reference the following documents required to be filed with the SEC or the Decision Makers, as applicable, subsequent to the date of the MTN Prospectus in connection with the Current Offering and any prospectuses in connection with Future Offerings, but prior to the termination of the particular offering:

A. any annual reports on Form 20-F of Total filed with the SEC, excluding any Non-Incorporated Exhibits;

B. any quarterly reports on Form 6-K of Total filed with the SEC and all current reports on Form 6-K of Total required to be filed with the SEC, excluding any Non-Essential 6-Ks and Non-Incorporated Exhibits relating to the foregoing; and

C. any material change reports filed by Total Capital or Total Capital Canada;

(e) the Filers file updated earnings coverage ratios for Total in accordance with U.S. requirements, concurrently with the filing of:

(i) the most recent annual report on Form 20-F of Total filed with the SEC; and

(ii) all quarterly reports on Form 6-K of Total filed with the SEC in respect of the financial year following the year that is the subject of the most recent annual report on Form 20-F of Total filed with the SEC,

either as an exhibit to such reports or as another document incorporated by reference in the MTN Prospectus or any prospectuses in connection with Future Offerings;

(f) in lieu of the Non-Incorporated Exhibits being incorporated by reference into the MTN Prospectus or any prospectuses in connection with Future Offerings, the Filers will file on SEDAR the Non-Incorporated Exhibits, other than Non-Incorporated Exhibits that have previously been filed, as soon as practicable following the filings of such disclosure documents with the SEC and, in any event, prior to the filing of any subsequent prospectus supplement (where applicable) on SEDAR;

(g) Total continues to provide a full and unconditional guarantee of the payments to be made by Total Capital and Total Capital Canada under the Notes issued by Total Capital and Total Capital Canada, as stipulated in the terms of the Notes or any agreement governing the rights of holders of the Notes, that results in the holder of such Notes being entitled to receive payment from Total duly and promptly on demand upon any failure by Total Capital or Total Capital Canada to make a payment, notwithstanding the terms of the guarantee may not entitle the holder of the securities to receive payment from Total within 15 days of any failure by Total Capital or Total Capital Canada to make a payment;

(h) all Notes issued by the Filers pursuant to the Current Offering and the Future Offerings will have received an Approved Rating;

(i) the Filers continue to satisfy the conditions for relief from the Continuous Disclosure Requirements set forth below;

(j) the Filers undertake to cause to be filed with applicable securities regulators, in electronic format through SEDAR under the SEDAR profile of each of the Filers, the following documents required to be filed by Total with the SEC under section 13 and section 15(d) of the 1934 Act, at the same time or as soon as practicable after the filing by Total of those documents with the SEC:

(i) all annual reports on Form 20-F of Total filed with the SEC;

(ii) all quarterly reports on Form 6-K of Total filed with the SEC; and

(iii) all current reports on Form 6-K required to be filed with the SEC, excluding any Non-Essential 6-Ks,

until such time as the Notes are no longer outstanding;

(k) the consolidated annual financial statements and the consolidated interim financial statements of Total dated on or after January 1, 2009 that will be included or incorporated by reference in the MTN Prospectus and any prospectuses in connection with Future Offerings will be prepared in accordance with NI 52-107; and

(l) the MTN Prospectus, as well as any prospectuses filed by Total Capital or Total Capital Canada in connection with any Future Offering, will disclose that future disclosure required for Total Capital or Total Capital Canada by Item 11 of 44-101F1 will be addressed by incorporating by reference Total's SEC Filings (other than Non-Essential 6-Ks and Non-Incorporated Exhibits), and that separate disclosure with respect to Total Capital and Total Capital Canada will not be provided.

The further decision of the Decision Makers under the Legislation is that the Filers are exempt from the Continuous Disclosure Requirements, the Certification Requirement, the Audit Committee Requirements and the Corporate Governance Requirements provided that:

(a) the Filers comply with the requirements and conditions of section 13.4(2) of NI 51-102, other than the requirements of:

(i) subparagraph 13.4(2)(b)(i) that Total be incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia; and

(ii) subparagraph 13.4(2)(c)(i) that the holders of designated credit support securities be entitled to receive payment from the credit supporter within 15 days of any failure by the credit support issuer to make a payment; and

(iii) paragraph 13.4(2)(a) that Total be the beneficial owner of all the issued and outstanding equity securities of Total Capital; and

(iv) subparagraph 13.4(2)(c)(ii) that Total Capital not issue any securities, and not have any securities outstanding, other than securities issued to and held by Total or an affiliate of Total;

(b) Total remains incorporated or organized under the laws of France;

(c) Total is the only credit supporter of Total Capital and Total Capital Canada in connection with the MTN Prospectus or any prospectus under a Future Offering;

(d) Total provides a full and unconditional guarantee of the payments to be made by Total Capital and Total Capital Canada under any Notes in connection with the MTN Prospectus or any prospectus under a Future Offering, as stipulated in the terms of the Notes or in any agreement governing the rights of holders of the Notes, that results in the holder of such Notes being entitled to receive payment from Total duly and promptly on demand upon any failure by Total Capital or Total Capital Canada to make a payment, notwithstanding the terms of the guarantee may not entitle the holder of the securities to receive payment from Total within 15 days of any failure by Total Capital or Total Capital Canada to make a payment;

(e) Total remains the beneficial owner of all of the outstanding voting securities of Total Capital except for the nominal number of securities of Total Capital that are required to be issued to directors of Total Capital in compliance with the laws of France; and

(f) Total Capital and Total Capital Canada do not issue any securities, other than: (i) the Notes that may be issued under the Current Offering and any Future Offering (which are not designated credit support securities for the purposes of subparagraph 13.4(2)(c)(i) of NI 51-102); (ii) securities described in subparagraphs 13.4(2)(c)(i) through (iv) of NI 51-102, as amended or replaced from time to time; and (iii) nominal securities of Total Capital issued to directors of Total Capital to comply with the laws of France.

The further decision of the Decision Makers under the Legislation is that insiders of the Filers are exempt from the Insider Reporting Requirements provided that:

(a) insiders of Total comply with insider reporting requirements under U.S. securities laws;

(b) insiders of Total Capital and Total Capital Canada comply with paragraphs 13.4(3)(b) and 13.4(3)(c) of NI 51-102; and

(c) the Filers continue to satisfy the conditions for relief from the Continuous Disclosure Requirements set forth above.

Furthermore, the decision of the Decision Makers is that the Confidentiality Sought is granted.

"Blaine Young"
Associate Director, Corporate Finance
Alberta Securities Commission