TOTALENERGIES COMMITS A “FALLBACK” FROM RUSSIA WITH A PROVISION OF 4.1 BILLION DOLLARS
PARIS (Reuters) – TotalEnergies announced on Wednesday a provision of $4.1 billion linked mainly to the Arctic LNG 2 liquefied natural gas (LNG) project which, according to it, marks the beginning of a “retreat” from Russia as a result. of the war in Ukraine.
The French group specified that this provision, recorded on March 31, resulted from the new sanctions adopted by the European authorities against Russia prohibiting in particular the export from the European Union of goods and technologies intended for the liquefaction of gas natural for the benefit of a Russian company.
“It appears that these new bans pose additional risks to the execution capacity of the Arctic LNG 2 project”, underlined in a press release TotalEnergies, which holds a 10% stake in this 21 billion dollar project alongside the Russian Novatek (60%).
The depreciation announced Wednesday “shows that TotalEnergies has begun to turn the page” and marks “the beginning of a decline” vis-à-vis Russia, said a spokesperson for the group.
TotalEnergies had already warned on March 22 that it would no longer record proven reserves in its Arctic LNG 2 accounts and that it would no longer contribute capital given the “uncertainties” posed by the technological sanctions. and financial on its realization.
He also announced on the same date that he would end his purchases of oil and petroleum products from Russia by the end of the year, after having decided not to invest in new projects there, by continuing to supply Europe with Russian gas.
However, TotalEnergies has so far ruled out withdrawing entirely from Russia, which accounted for 10% of its capital employed at the end of 2021, or $13.7 billion, as well as 5% of its cash flows, 17% of its oil and gas production and 21% of its reserves (excluding Arctic LNG 2), while considering that this country was not putting its future at stake.
The French group, criticized by certain NGOs, accusing it of continuing its activities in Russia despite the offensive launched by Moscow in Ukraine on February 24, is also present in Russia through the assets of Yamal LNG and a stake of 19.4 % stake in Novatek.
(Report Benjamin Mallet, edited by Jean Terzian)