PARIS (Agefi-Dow Jones)–TotalEnergies’ exposure to Russia is “very manageable”, the group’s CEO, Patrick Pouyanné, said on Thursday, ahead of an investor conference devoted to the energy producer’s climate objectives.
The leader indicated that Russia represented 13.7 billion dollars, or 10%, of the capital employed at the end of 2021. According to the group’s policy, the same country must not represent more than 10% of the group’s portfolio, explained Patrick Pouyanne.
In 2021, Russia accounted for 5% of upstream operating cash flow, or $1.5 billion, he added.
In terms of volumes, 17% of TotalEnergies’ hydrocarbon production comes from Russia. The country also represents 21% of the group’s reserves, excluding Arctic LNG-2.
“But what is important for shareholders is the value that can be drawn from these volumes”, tempered Patrick Pouyanné.
“These volumes are impressive but they are linked to the volumes of Novatek”, the Russian producer in which TotalEnergies is a 19.4% shareholder. These mainly concern gas for the local market and whose margin is low, explained the manager.
It is for this reason that volumes of around 20% represent only 5% of cash flow, added Patrick Pouyanné.
In addition, the leader indicated that the almost doubling of LNG production expected by TotalEnergies by 2030 would be based on the group’s assets and projects outside Russia, such as those in the United States, Africa and Papua New Guinea.
With regard to its hydrocarbon supply contracts from Russia, TotalEnergies has confirmed that its purchases of petroleum and petroleum products will cease by the end of the year, at the end of current contracts concerning approximately 10 million tons per year of petroleum and about 2 million tons per year of petroleum products.
For LNG, the group is linked to Yamal by a contract lasting around 21 years for the supply of five million tonnes per year, said Patrick Pouyanné on Thursday.
“We do not know how to stop long-term contracts, unless governments decide on sanctions” allowing the exercise of force majeure, explained Patrick Pouanné on Wednesday, during an interview on RTL.
-Alice Doré, Agefi-Dow Jones; +33 (0)1 41 27 47 90; [email protected] ed: LBO
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March 24, 2022 10:17 ET (14:17 GMT)