TotalEnergies continues to withdraw from Russia

POINT – The French major recorded its fourth accounting depreciation and reduced the value of its properties in the country to zero. However, it continues to market Siberian LNG in Europe.

TotalEnergies is gradually withdrawing from Russia. The French group announced on Friday a new write-down of $3.7 billion in assets related to its 19.4% stake in local partner Novatek.

This is the fourth such provision since the invasion of Ukraine began in late February. During this period, the group decided to make four write-offs for a $14.4 billion accounting loss, representing all its assets in the country.

TotalEnergies highlights the presence of around twenty French companies that remain in Russia with this new step towards a full exit.

This latest devaluation follows the major’s decision to remove two directors from Novatek’s board of directors. French group’s condition to deconsolidate Novatek in its accounts. However, it retains its 19.4% stake, which it cannot resell. Indeed, the French company, he explains in a press release, “It is unable to sell (them) given the existing agreements between the shareholders, because the sale of assets is prohibited due to sanctions against one of Novatek’s main shareholders”. It is clear that TotalEnergies can only sell its shares to Novatek strongman Gennady Timchenko, but he is prevented from doing so because he is under Western sanctions.

As the French group officially remains in the capital of its Russian partner, it should continue to receive dividends, notes Biraj Borkhataria, head of European research at RBS. “Given the increase in energy prices, we expect Novatek’s dividend payment to TotalEnergies in the fourth quarter to be higher than that paid in the second quarter”, or about $450 million, he adds. TotalEnergies’ announcement is therefore not enough to quell the controversy in October when Ukrainian President Volodymyr Zelensky’s economic adviser, Oleg Oustenkin, denounced dividends. “blood stains”. CEO Patrick Pouyanné at the group’s investor days in New York, the payment of these amounts “Increasingly complex”.

SEE ALSO – Energy crisis: “TotalEnergies could leave Russia tomorrow morning”, assures Patrick Pouyanné

“Payments are a real headache in either direction (East-West or West-East), whether it’s employee salaries, dividend payments (blocked by Russian counter-sanctions) or paying subcontractor invoices.the country’s expert provides detailed information. Not to mention that payments to Western companies belonging to countries that the Russians categorize as “unfriendly” (like France) are more complicated. »

The fact is that TotalEnergies continues to move away from Russia. He first suspended all commercial activities a few weeks after the attack on Ukraine, then sold his stakes in oil and gas fields during the summer months. During his presentation to investors in New York, Patrick Pouyanné highlighted TotalEnergies. “Without Russia”. Without announcing the general and unilateral withdrawal of the group. The French major holds gas assets in Siberia in Yamal. This liquefaction plant allows Europe to be watered with precious liquefied natural gas, the CEO argues.

Towards a common exit

Some insiders in the oil and gas sector recall that there has been no such strong action since the big announcements by British majors Shell and BP about layoffs. On December 4, a Ukrainian economic adviser attacked BP as well as TotalEnergies. The group retains 20% of Russian oil company Rosneft because it cannot sell them. Unlike the French, the English said he did not touch ” hundred “ dividend from partner.

According to an estimate by a researcher from Yale University, TotalEnergies highlights the presence of about two dozen French companies that remain in Russia with this new step to completely withdraw. Those who play expansions mainly come from the consumer sector, such as Auchan or Lactalis. The world’s number one spokesman for milk was thus justified in October Western France that“So far we have chosen to stay in Russia; we believe we are fulfilling our mission to feed the civilian population”.

As for Danone, it decided to reduce its availability by 90% in the autumn, keeping only the production of baby milk. At the end of the day, a loss of 1 billion euros. At the beginning of 2022, the group had 7,200 employees working in 13 factories, representing 5% of its turnover.

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