The noose was tightening for TotalEnergies, well insulated in its strategy of keeping its activities in Russia following chain divestitures by Western oil and gas giants, from BP to Shell to ExxonMobil. A few days ago, the EELV candidate for the presidential election, Yannick Jadot, even accused the tricolor company of complicity in ” war crime “, while the environmental NGOs multiplied the mobilizations, determined to bend their executive director, Patrick Pouyanné.
« Faced with the escalation of the conflict “and no doubt in addition to the accompanying media firestorm, TotalEnergies thus argued in a press release on Tuesday that it would stop all purchases of Russian oil or oil products” no later than the end of 2022 “, despite the fact that the European Union has not imposed an embargo on black gold. But also that he would commit to the ” gradual suspension of their activities ” in the country of Vladimir Putin, and that he would not bring ” more capital for the development of projects in Russia This will particularly affect the Artic LNG 2 liquefied natural gas (LNG) plant megaproject, whose commissioning was previously scheduled for 2023 with a final capacity of almost twenty million tons.
Until March 7, Patrick Pouyanné had already ensured that « [s]the traders (from the group’s market activities, editor’s note) [prenaient] no more Russian oil since the beginning of the crisis “But this Tuesday’s announcement goes further because it is about black gold supply contracts.
The group continues to honor their long tenures in Yamal
However, for gas, the oil giant” continues to supply Europe with LNG from the Yamal LNG plant “, this giant gas liquefaction site in the north of the country that has produced almost 18 million tons of LNG per year since December 2017, and represented 16.6% of TotalEnergies’ annual gas production in 2020. And for good reason, the company is bound by long-term contracts that it must honor as long as governments deem Russian gas necessary », specifies TotalEnergies in its press release.
To justify itself, the group highlights the decision of the European Union to maintain, at this stage, the supply of Russian gas despite the war in Ukraine. In fact, Moscow continues to supply abundant fossil fuels to the Old Continent, which has provided him with nearly 17,000 million euros in exchange since the beginning of the conflict on February 24.
Non-disposal of shares in gas assets
As a reminder, it is gas and not oil that accounts for more than 80% of TotalEnergies’ hydrocarbon production in Russia (Vladimir Putin’s country has the world’s first proven reserves). Specifically, the group owns a 19.4% stake in the second largest Russian gas company, Novatek. In total (ie including his shares in Novatek), he also owns 29.7% of Yamal LNG and 21.64% of Arctic LNG 2.
Under these conditions, TotalEnergies has no intention of abandoning its shares in the short term, given that the “ current context [l’]would prevent it from finding a non-Russian buyer to take over its minority holdings in Russia »
“In addition, abandoning the holding companies in which TotalEnergies is a minority shareholder would not have any impact on the operation of the affected companies and therefore on their income, since these companies have their own staff and are managed independently,” the company argues.
A strategic territory for TotalEnergies
Still, the impact would also be significant for TotalEnergies. Because if the group realizes in Russia alone” 3 to 5% of its income, Patrick Pouyanné had minimized at the end of February, the Russian territory was until then eminently strategic for TotalEnergies, which had opted for it with a long-term vision.
« According to its CEO, if we want to get out of oil we have to bet on renewable energies but also on gas. Therefore, Russian LNG represents an important activity in its plan towards the transition, and withdrawing from it today is not at all in line with its long-term strategy! “, slipped a source close to the company to The galery early March.
Proof of this is its enormous financial investment in Russia: in total, the group has invested almost 20,000 million euros, much more than in other places. Thus, as of December 31, 2020, Total maintains 24% of its proven reserves in Russia, where 16.6% of the Group’s combined production of liquids and gas also came from in 2020, that is, twice as much as in 2012.