SPIEGEL ONLINE: Total earned profits of close to €14 billion ($18.5 billion) in 2008, a record in French economic history. Aren't you affected by the recession?
Mallet: Yes, we are. Our revenues are closely tied to the oil price, which has fallen. We are experiencing a slight decline at the moment. But we are in better shape than other industries. You can put off buying a car, but you need to fill up on a regular basis.
SPIEGEL ONLINE: Last summer, a barrel of crude oil cost $147. The price has dropped to $47 today. But that's still a lot, given that a barrel of oil cost only $9 a few years ago.
Mallet: Nine dollars was a catastrophe. We need reasonable prices, or else there is no incentive for investment.
SPIEGEL ONLINE: You have to say that. But is $47 enough?
Mallet: No. At that price, you can drain an old oil field. But the profit threshold for drilling new wells in the ocean, at a depth of 2,000 meters (5,300 feet), is $60, and the major producing countries want even more. Venezuela needs an oil price of $90 to balance its national budget, while Iran needs $80.
SPIEGEL ONLINE: And what price does Total want?
Mallet: For us, an oil price of between $50 and $90 a barrel would be reasonable. Let's say $80. In Germany, that would translate into prices of about €1.40 ($7 a gallon) for a liter of super and €1.25 ($6.30 a gallon) for a liter of diesel.
SPIEGEL ONLINE: You aren't exactly modest.
Mallet: Oil production will be technically complex in the future, which makes it expensive.
SPIEGEL ONLINE: Why?
Mallet: There are hardly any readily accessible oil fields anymore. The fields on the floor of the North Sea, for example, are practically empty. New reserves are only being found deep in the ocean, in remote regions like Kazakhstan or in the form of oil sands. None of this is cheap to produce.
SPIEGEL ONLINE: The International Energy Agency is warning of a new mega-crisis, arguing that because the oil companies are not investing enough in production, the price of oil could shoot up to $200 by 2013.
Mallet: A price of $200 would be dramatic for the world economy. If we were to gradually move in that direction, it would be okay. Then we'd have time to develop alternative technologies. But not by 2013. That's not enough time.
SPIEGEL ONLINE: What are you doing to avert this scenario?
Mallet: Total is investing $18 billion (€13.6 billion) this year. This is far more than our competitors, based on profits.
SPIEGEL ONLINE: Nevertheless, you are unable to increase production. In fact, it declined last year.
Mallet: The drilling licenses are the problem. The countries that have oil are behaving very restrictively. In the 1970s, the seven largest oil companies controlled 70 percent of reserves. Today it's only seven percent, with the lion's share now in government hands.
SPIEGEL ONLINE: What's so bad about that? Countries like Venezuela, Iran, Iraq or Russia can certainly produce their own oil.
Mallet: Of course. But the government-owned companies, to a large extent, lack the technical know-how we have accumulated in the last few decades. For that reason, they unable to produce as efficiently, especially in the new, difficult drilling areas.
SPIEGEL ONLINE: Total is also canceling projects because of the economic crisis, such as production from oil sands in Canada.
Mallet: No. All we are doing is delaying projects. In general, the crisis is even beneficial to us. Prices for drilling equipment have returned to normal again.
'The Old Oil Fields Are Dying'
SPIEGEL ONLINE: Is it even possible to increase oil production anymore?
Mallet: About 87 million barrels a day are produced worldwide. In the past, it was believed that this number could be increased to 130 million. I consider that an illusion. Realistically, the capacity is less than 105 million barrels.
SPIEGEL ONLINE: It sounds like the peak oil theory, which isn't very popular among your competitors. It holds that maximum production will be reached soon.
Mallet: The old oil fields are dying. In the future, we will have to invest more and more just to maintain existing production.
SPIEGEL ONLINE: Is the age of oil coming to an end?
Mallet: No, not really. There is plenty of oil, geologically speaking. The question is just how much can be produced a year.
SPIEGEL ONLINE: How much oil is left in the earth?
Mallet: Since the beginning of industrial production, mankind has used about 1 trillion barrels, most of it in the last 30 years. About the same amount is still available, plus possible new finds. And then there are unconventional reserves such as heavy crude oil, oil sands and oil shale, although developing them is expensive. And not all aspects have been resolved when it comes to the effects on the environment.
SPIEGEL ONLINE: So how much longer will the oil last?
Mallet: We won't have any problems for the next 20 years. If we handle demand responsibly, it could even last another 40 or 50 years.
SPIEGEL ONLINE: But what if demand increases, particularly in Asia?
Mallet: That's why we have a clear message: We have to save, save, save.
SPIEGEL ONLINE: Total is the only oil company that is predicting stagnating production. Are the others ignoring the truth?
Mallet: I don't know. But I do know that anyone who encourages people to buy big cars to increase his oil sales is making a big mistake. I myself walk to work.
SPIEGEL ONLINE: Perhaps you are just dramatizing the issue to justify high gasoline prices.
Mallet: Gasoline isn't expensive. It costs less than 32 cents a liter ($1.60 a gallon) before taxes. It's cheaper than good mineral water.
SPIEGEL ONLINE: Millions of drivers would disagree.
Mallet: In Germany, we have the lowest profit margin in all of Europe. Competition is extremely tough. For a one-cent difference in price, Germans are willing to go well out of their way to drive to a different gas station.
SPIEGEL ONLINE: Some politicians want to see the petroleum tax reduced.
Mallet: The purpose of the petroleum tax is to pay for investment in new forms of energy, and in research that will guarantee long-term and environmentally friendly mobility. That's something drivers should also welcome.
SPIEGEL ONLINE: Total wants a higher petroleum tax?
Mallet: No. But energy has to cost something. We need incentives to economize, as well as to develop alternatives. For instance, there is no tax on aviation fuel, which is completely unreasonable. There are three parties involved in saving energy: the political sphere, with its laws and guidelines, the industry, while makes efficient products available, and consumers, who can achieve a lot with their behavior.
SPIEGEL ONLINE: Customers are likely to have other desires.
Mallet: Why? If energy consumption declines, it will not become more expensive overall for customers. A liter of gasoline will cost more, but those who drive fuel-efficient cars won't have to fill up as often.