PARIS (Reuters) – TotalEnergies announced on Friday that it would withdraw its representatives from Novatek’s board of directors and deconsolidate its 19.4% stake in the Russian gas company, which will lead to an exceptional depreciation of 3.7 billion dollars (3.5 billion euros) in the fourth quarter.
TotalEnergies, which initiated a gradual withdrawal from Russia after the invasion of Ukraine decided by Moscow, specified in a press release that it is not in a state to sell this stake since it is prohibited from sell assets to one of Novatek’s main shareholders because of sanctions against him.
“Given the European sanctions in force since the beginning of the conflict, the two directors representing TotalEnergies on the board of directors of Novatek are led to abstain from meetings of the board of directors of this company, in particular on questions financial resources”, explained TotalEnergies.
As these directors are no longer in a position to “fully carry out their mission”, the group has decided to withdraw them with immediate effect.
Consequently, TotalEnergies must deconsolidate Novatek’s stake from its accounts, which will lead to the exceptional depreciation for the current quarter.
“In addition, TotalEnergies will no longer record reserves for its stake in Novatek, with an impact on the proven reserves declared at the end of 2021 of 1.7 billion barrels”, added the group.
During the third quarter, the oil major recorded record adjusted net income boosted by the jump in the price of hydrocarbons but had already had to pass a provision linked to Russia in the amount of 3.1 billion dollars.
On the Paris Stock Exchange, the TotalEnergies stock fell by 1.2% around 3:50 p.m. GMT.
“The question posed by this announcement is ‘why today and not earlier'”, commented Biraj Borkhataria, analyst at RBC. “The stake in Novatek was, from our point of view, the one that TotalEnergies could most easily give up.”
The payment of dividends by Novatek to the French oil company in the fourth quarter should not be affected by this decision, estimated the analyst, who said he expected the sum to be higher than the 450 million dollars paid at the end of the year. second trimester.
TotalEnergies, on the other hand, has no intention of withdrawing from the Yamal LNG natural gas project for the moment, we learned from a source familiar with the matter.
The group’s managing director, Patrick Pouyanné, has said on several occasions that he will not leave the project as long as it is not subject to sanctions from the European Union, while Brussels wishes to avoid a total rupture of the supply of Russian gas to Europe.
(Reporting from the offices of Reuters and Silvia Aloisi in Paris, written by Blandine Hénault and Tangi Salaün, edited by Jean-Stéphane Brosse and Kate Entringer)