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TotalEnergies pulls out of Russian gas giant Novatek

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The French group TotalEnergies announced this Friday, December 9, to withdraw its directors from the Russian Novatek and no longer recognize in its results the 19.4% it holds in the gas giant, consequently providing for an asset depreciation of 3.7 billion. dollars in the fourth quarter.

Unlike other Western majors, TotalEnergies has maintained most of its investments in Russia since the outbreak of war in Ukraine in February, notably in liquefied natural gas (LNG) projects.

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He explains this Friday ne “not being able to give in” its 19.4% stake in Novatek, “since he is prohibited from selling assets to a major shareholder of Novatek due to the sanctions” Europeans targeting Russia.

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The board of directors of TotalEnergies has, however, “decided to withdraw the representatives of the company from the board of directors of PAO Novatek with immediate effect”announced in a press release the French hydrocarbon giant present in 130 countries.

“A depreciation of approximately $3.7 billion”

“Consequently, the significant influence criteria no longer being met within the meaning of the accounting regulations followed by the company, the 19.4% stake held by TotalEnergies in Novatek will no longer be consolidated in the company’s accounts”added this one.

This will lead TotalEnergies to record in its accounts for the fourth quarter of 2022 “an impairment of approximately $3.7 billion”, said the group, which also announces that it will record 1.7 billion barrels less in its reserves, now excluding those of Novatek. Novatek is the historic partner of TotalEnergies in Russia.

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In addition to Novatek, TotalEnergies has other minority stakes in various Russian private companies, such as the gigantic gas field in Arctic Siberia Yamal LNG (20%) and the Arctic LNG 2 field (10%). But the French group states in its annual report that it does not have “no activity or operational responsibility on these sites” and no longer operate “no oil or gas fields or liquefied natural gas (LNG) plants in Russia”.

“TotalEnergies has begun its gradual withdrawal of Russian assets while ensuring that it continues to supply LNG to Europe”says the group in its press release this Friday, December 9.

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