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TotalEnergies stakes $3.7bn hit

from Novatek stake

RUSSIA TOTALENERGIES has booked a $3.7bn directors from Novatek’s board, as they cannot
impairment on its 19.4% interest in Russian vote in meetings because of sanctions, especially
TotalEnergies no longer LNG supplier Novatek, as the French major pre- with regard to financial matters, the French firm
recognises its stake in pares to wind down its activities in the country. said.
Novatek on its books. In a statement on December 9, TotalEnergies “They are therefore no longer in a position to
said it would no longer account for the equity fully carry out their duties on the board, which
stake in Novatek on its books. It will also remove might become an issue for the governance of this
1.7bn barrels of oil from its proven reserves, but company,” TotalEnergies, adding that its repre-
noted this would still leave the company with sentatives would be withdrawn immediately.
enough reserves to maintain current output for TotalEnergies has committed to halting
over 11 more years. investment at Novatek’s Arctic LNG-2 project,
TotalEnergies added that it could not sell the which the Russian company recently insisted
interest in Novatek “given the prevailing share- was still on track to start production in late
holders’ agreements, as it is forbidden for [the 2023. For the same reason it is keeping its stake
company] to sell any asset to one of Novatek’s in Novatek, the major also says it will maintain
main shareholders who is under sanction.” The its interest in the operational Yamal LNG plant
Russian company’s largest owner is CEO Leonid operated by the Russian firm.
Mikhelson, while its second is another Russian In August, however, TotalEnergies did divest
billionaire and Kremlin ally, Gennady Tim- its 49% stake in the Terneftegaz joint venture to
chenko. Both businessmen have been blacklisted Novatek, raising the latter’s ownership to 100%.
under Western sanctions. The joint venture controls the Termokarstovoye
TotalEnergies is also recalling two of its and Chernichnoye oil and gas fields. ™

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