Can the TotalEnergies group (ex-Total) continue to intervene in Russia, while several Western companies are already leaving the country to protest against the war in Ukraine?
Under pressure from the British government, another oil giant, BP, announced on Sunday February 27 that it intended to sell its 19.75% stake in the capital of the Russian public group Rosneft – the second local oil producer. BP CEO Bernard Looney also resigned from Rosneft board ” with immediate effect “. A radical decision which risks being costly for BP – its stake was valued at 14 billion dollars (12.4 billion euros) at the end of 2021.
On Monday February 28, it was the Norwegian public firm Equinor (ex-Statoil) which announced that it was ending its partnership with Rosneft. Equinor has $1.2 billion in assets in Russia. An announcement followed by the Anglo-Dutch group Shell, which interrupted its partnership with Gazprom at the end of the day on Monday.
Contacted by The world, TotalEnergies refuses to comment on the subject, but does not intend, for the time being, to cease its commitments. Russia is today the main source of production for the French group: in 2020, 17% of its oil and gas production was on Russian territory, mainly gas, but also oil – and 25% of its reserves as well. Thursday, February 24, quoted by Agence France-Presse (AFP), Patrick Pouyanné, the CEO of the company, rather insisted on another percentage, as if it were a question of minimizing this importance: the Russian market constitutes between 3% and 5% of company revenue.
The French major on “the hot seat”
TotalEnergies is a 19.4% shareholder in the Russian company Novatek. This company is not public, unlike Rosneft, but it was founded and remains chaired by Leonid Mikhelson, a well-known billionaire close to the Kremlin. Representatives of TotalEnergies sit on its board of directors.
During the inauguration, in December 2017, of one of the major projects of the Russian group, Yamal LNG, a gas export plant across Arctic waters, Russian President Vladimir Putin came in person to salute the role played by Leonid Mikhelson, in the presence of Patrick Pouyanné. TotalEnergies is also one of Novatek’s main partners in this project – just like in a neighboring gas yard, Arctic LNG 2, which is not yet in operation. The Yamal project received, at the time, the support of the French authorities through an export guarantee – even though Russia was already under international sanction, since 2014, for the invasion of Crimea. The strategy of Novatek and TotalEnergies in Siberia is to bet on the melting ice in the Arctic to be able to export more and more liquefied natural gas (LNG) by ship to China and South Korea – a route that is only available today for a few months of the year.
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