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Russia: TotalEnergies Continues to Implement Its Principles of Conduct and Sells Its 49% Interest in the Russian Termokarstovoye Gas Field to Novatek
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Rhea-AI Summary
On March 22, 2022, TotalEnergies (Euronext: TTE) condemned Russia's military actions in Ukraine while affirming compliance with European sanctions. The company announced a gradual suspension of operations in Russia unrelated to European energy security, including mothballing assets like the Kharyaga oil project. In line with these actions, TotalEnergies sold its 20% stake in Kharyaga on August 3, 2022, and a 49% interest in the Termokarstovoye field on August 26, 2022. These moves aim to balance responsibility towards energy supply to Europe with adherence to sanctions.
Positive
TotalEnergies' commitment to comply with European sanctions against Russia demonstrates corporate responsibility.
The sale of non-energy security related assets in Russia may mitigate risks associated with operations in the country.
Negative
Gradual suspension of operations in Russia could impact TotalEnergies' revenue streams from those assets.
Selling stakes in key projects like Kharyaga and Termokarstovoye may limit future growth potential in the Russian market.
PARIS--(BUSINESS WIRE)--
Regulatory News:
On March 22, 2022, TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) publicly shared its principles of conduct for its Russian related business. TotalEnergies reiterated its firmest condemnation of Russia's military aggression against Ukraine and stated that it would ensure strict compliance with current and future European sanctions, no matter what the consequences on the management of its assets in Russia.
TotalEnergies thus restated its duty to contribute toward securing Europe’s gas supply from the Yamal LNG plant within the framework of long-term contracts that it must honor as long as Europe's governments do not take sanctions on Russian gas. TotalEnergies also announced the gradual suspension of its activities in Russia for those which do not contribute to the security of energy supply of Europe. This included assets producing oil (Kharyaga field) and gas for the local Russian market (Termokarstovoye field) as well as other local businesses (lubricants, batteries) which were mothballed in the first half of the year.
On July 6, 2022, in line with these principles, TotalEnergies announced the sale of its remaining 20% interest in the Kharyaga oil project to Zarubezhneft. This transfer was finalized on August 3, 2022.
On July 18, 2022, TotalEnergies agreed to sell to Novatek TotalEnergies' 49% interest in Terneftegaz, which operates the Termokarstovoye gas and condensates field in Russia, on economic terms enabling TotalEnergies to recover the outstanding amounts invested in the field.
Pursuant to Russian regulations, a request to authorize this transaction was addressed to the Russian authorities on August 8, 2022. On August 25, 2022, Russian authorities issued their agreement to the proposed sale. As a result, on August 26, 2022, TotalEnergies and Novatek signed the final sale and purchase agreement of TotalEnergies’ 49% interest in Terneftegaz. Closing is expected in September 2022, subject to customary conditions.
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About TotalEnergies TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to energy that is ever more affordable, cleaner, more reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
Cautionary Note
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TotalEnergies SE directly or indirectly owns investments are separate legal entities. TotalEnergies SE has no liability for their acts or omissions. The terms “Company” or “TotalEnergies company” refer collectively to the company TotalEnergies SE and the companies it controls directly or indirectly. Such terms are used solely for the sake of convenience for purposes of the present communication. Likewise, the words “we”, “us” and “our” may also be used to refer to subsidiaries in general or to those who work for them. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
