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TotalEnergies holds almost 20% in the Russian gas company. The French major is however not going to sell it.
TotalEnergies explains that it is unable to sell its shares in Novatek. The French major is prohibited from selling assets to one of the main shareholders of the private Russian company. The Russian-Finnish businessman Guennadi Timchenko is indeed targeted by European sanctions.
The disengagement of TotalEnergies will therefore go through a new depreciation of assets in its accounts, for an amount of 3.7 billion dollars. This brings the book loss from its Russian business to more than $14 billion this year. The energy company also indicates that it will withdraw one billion 700 million barrels from its proven reserves.
No withdrawal from TotalEnergies
At the same time, the two representatives of the French major are withdrawing from the board of directors of PAO Novatek. This formula isolates the participation of TotalEnergies in a sort of dormant cocoon which no longer brings in anything.. With this operation, TotalEnergies is not completely disengaging from Russia. The major still owns 20% of the Yamal field, which produces 5 million tonnes of liquefied natural gas each year, mainly for the European Union.
« At the moment there is no embargo on Russian gas. So Novatek’s gas is liquefied natural gas, which Novatek can continue to export and upgrade. Now, one of the problems is that there were very important projects to extend the gas liquefaction units. In the current context, it will be very complicated for Novatek to do it alone, also deciphers Jean-Pierre Favennec, energy consultant and university professor. Russia doesn’t quite have the technology to build liquefaction units. Development is extremely difficult, if not impossible. »
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