Page 8 - FSUOGM Week 50 2022

FSUOGM INVESTMENT FSUOGM

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noted this would still leave the company with sentatives would be withdrawn immediately.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. ™

POLICY

Russian budget surplus quadruples

in November

RUSSIA RUSSIA'S budgetary surplus more than quad- since the war began. The state-owned company
rupled in November, despite its revenues being dealt out its first interim dividends this year.
A windfall tax on drained by its ongoing war in Ukraine, marking Russia’s government has relied so far on its
Gazprom’s profit another month of improvement on the back of wealth fund and increased domestic borrowing
benefited greatly. high dividends and a windfall tax slapped on to cover funding requirements. But the move to
Gazprom. take a greater slice of Gazprom’s profits is remi-
The surplus came to RUB557BN ($9bn) in niscent of its raiding of the company’s finances
the first 11 months of 2022, the Finance Ministry under President Boris Yeltsin during the 1990s.
reported on December 12, up from RUB128.4bn Moscow’s windfall tax on Gazprom
in January to October. The ministry had been amounted to $20bn between September and
predicting a budget shortfall of 0.9% of gross November, with the company paying $6.5bn
domestic product for the full year, but now pre- each of those months. Russia earns an esti-
dicts the deficit will climb to 2% as revenues are mated $100mn daily from sales to the European
sapped and war spending increases. However, market.
the full-year plan has already been exceeded in Moving forward, while gas prices are set
January to November. to remain elevated, oil prices remain more or
Moscow imposed a one-time tax increase on less stable, despite the EU putting into place its
Gazprom, given that the company has benefited embargo on Russian crude earlier this month.
hugely from soaring gas prices in Europe, more This is expected to cause a hit to Russian oil pro-
than offsetting the steep drop in volumes sold duction by the end of the year. ™

P8 www. NEWSBASE .com Week 50 15•December•2022