The French Company TotalEnergies pulls out its stakes from the Russian energy giant Novatek and withdraws capital. The press service of the Company reports it.
TotalEnergies company profile
TotalEnergies is a global multi-energy company that produces and sells energy:
- Oil and biofuels
- Natural gas and green gases
- Renewable energy sources and electricity
TotalEnergies, which operates in more than 130 countries, puts sustainable development in all aspects at the heart of its projects and operations to contribute to the well-being of people.
Why is TotalEnergies urgently selling its Russian stakes?
TotalEnergies is urgently selling its 19.4% stake and dismissing its representatives from the Board of directors of Russia’s Novatek. The Company said that the decision takes effect immediately, and the income from the investment will not be included in the financial statements.
“Given the European sanctions that have been in place since the beginning of the war, the two directors representing TotalEnergies on the Board of directors of Novatek are forced to abstain from voting at the meetings of the Board of directors of this Company, in particular on financial issues. Therefore, they can no longer fully discharge their duties on the Board, which may become a problem for the management of this Company. Under these circumstances, the Board of Directors of TotalEnergies immediately withdrew the Company’s representatives from the Board of PJSC Novatek”, the Company said.
It is noted that such a step will reduce TotalEnergie’s oil reserves by 1.7 billion barrels. Losses are estimated at $ 3.7 billion.
“This will lead to a reduction of approximately $3.7 billion in the reporting for the 4th quarter of 2022. In addition, TotalEnergies will no longer record reserves for its interest in Novatek, which will impact the Company’s proved reserves at the end of 2021. 1.7 billion barrels. However, the life of the Company’s proved reserves will remain above 11 years of production,” TotalEnergies said.
Under these circumstances, the Board of Directors of TotalEnergies decided to immediately withdraw the Company’s representatives from the Board of Novatek PJSC.
The French Company, unlike its rivals British Shell, Norwegian Equinor, and American ExxonMobile, has not withdrawn business from Russia despite the war in Ukraine and has often been criticized. The Company’s director Patrick Pouyanné said that this policy is “the delivery of liquefied gas to Europe.”
At the same time, TotalEnergies retains its stake in the Russian projects Yamal LNG and Arctic LNG-2.
Involvement of TotalEnergies in fuel supplies to the Russian army
French Minister for European Affairs Clement Beaune said that so far, there is not enough information about jet fuel supply for the Russian military. Reuters reports it.
“This is a serious topic, so it is necessary to investigate whether there was a circumvention of sanctions or the supply of energy produced by a company, French or otherwise,” the minister said.
However, Le Monde reported that TotalEnergies was involved in the supply of gas condensate for the production of jet fuel that could be used by Russian military aircraft in Ukraine through the French firm’s share in a joint venture with Russia’s Novatek.
Le Monde also reported that the jet fuel delivered to two Russian air force bases allegedly involved in the airstrikes in Ukraine was produced from gas condensate supplied by Ternaftogaz, of which TotalEnergies holds a 49% stake.
TotalEnergies, unlike its larger Western competitors, has maintained its assets in Russia despite criticism. The Company claimed it does not operate any infrastructure that would supply the Russian military and is unaware of any potential jet fuel production by its business partners.
Ukraine’s position on TotalEnergies
Earlier, the advisor to the head of the Office of the President of Ukraine, Mykhailo Podoliak, criticized TotalEnergies for its work in Russia on Twitter.
“You won’t believe it, but not all European companies have left the Russian market yet. Some still believe that money does not smell like the blood of dead children. TotalEnergies receives hundreds of millions of dollars in dividends from Novatek. The smallest atonement is to create a fund to support Ukrainian families who lost their loved ones due to Russian shells,” said Mykhailo Podolyak, Advisor to the Head of the Office of the President of Ukraine.
Minister for Foreign Affairs of Ukraine Dmytro Kuleba also called on the Company to leave Russia:
“We are grateful to French President Emmanuel Macron and the French people for supporting Ukraine. Against this background, it is a shame for France when French companies contribute to killing Ukrainians and destroying our cities. TotalEnergies, leave Russia!” he wrote.