Page 11 - FSUOGM Week 09 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

TotalEnergies to remain in Russia

despite Ukrainian invasion

UKRAINE FRENCH oil major TotalEnergies has said it come online in 2023. In addition, it is part-
intends to stay put in Russia despite Moscow’s nered with Novatek at the Terneftegas gas fields
TotalEnergies has invasion of Ukraine, although it has said it will and holds a share in the Zarubezhneft-oper-
shown greater restrain not invest in any new projects in the country. ated Kharyaga oilfield.
than its peers. TotalEnergies has shown greater restraint in Earlier on March 1 French Finance Minister
its response to events in Ukraine than its Euro- Bruno Le Maire told local radio that a decision
pean peers BP, Equinor and Shell, which have all on TotalEnergies’ continued involvement in Rus-
said they intend to exit Russia’s oil and gas indus- sia would be made within days, noting that there
try altogether. was a “question of principles.”
In a press release on March 1, TotalEnergies Yet TotalEnergies was previously non-com-
was clear in its opposition to Moscow’s actions, mittal about scaling back its business in Russia.
stating that it “condemns Russia’s military On February 24, the day that Moscow launched
aggression against Ukraine, which has tragic its invasion of Ukraine, CEO Patrick Pouyanne
consequences for the population and threatens said he was “convinced the Russians don’t want
Europe.” It also said it expressed “solidarity with to use gas as a weapon in the dispute.”
the Ukrainian people who are suffering with “We recently took a stance against Myanmar.
consequences and with the Russian people who We exited Myanmar, but people were criticis-
will also suffer the consequences.” ing us – why didn’t we do it immediately,” he
TotalEnergies added it would provide fuel to said at a conference. “But you know in life you
the Ukrainian authorities and aid to Ukrainian need to take time [to see] what exactly will hap-
refugees in Europe, while complying with the pen. I think it is premature to make this type of
sweeping sanctions that Europe has slapped on conclusion.”
Russia in recent days, which it said that it would At the start of the year, TotalEnergies’ holding
support. in Novatek was worth $13.1bn, but the impact
TotalEnergies alongside BP are considered of the invasion on the ruble and Russian stocks
to be the international oil companies (IOCs) means it is now valued at a mere $2.1bn, accord-
most entrenched in Russia. The former’s main ing to analysts at Morningstar. The holding
asset is a 19.4% stake in Russia’s top LNG accounts for around 5% of TotalEnergies global
exporter Novatek. It is also a minority share- oil and 30% of its gas production, and over the
holder in Novatek’s operational Yamal LNG past three years, it has generated 7% of its oper-
plant, and its Arctic LNG-2 project, due to ating cash flow. ™

NEWS IN BRIEF

Vulnerable Turkish economy amounted to $57bn. and 13.4% from Ukraine.
Looking at annual foreign trade volume,
“However, the hardest-hit sector [from
‘caught in Russia-Ukraine official data suggests that last year it impacts of the war] is likely to be tourism,”
noted Teneo. “Turkey was expecting 35
amounted to $34.7bn with Russia and
crossfire’ says Teneo $7.4bn with Ukraine. million tourists and total revenue of USD
35bn in 2022. This target looks now very
While citrus fruits, fresh grapes
The war between Russia and Ukraine places and tomatoes, land vehicles and their ambitious, if not out of reach, as almost
much at stake for Turkey’s economy, which equipment, and garments are the major 30% of tourists that visit Turkey are from
has been caught in the crossfire “during one export goods shipped from Turkey to Ukraine and, mainly, Russia. Russians
of its more fraught periods”, according to a Russia, Turkey mostly imported oil, accounted for 19% of foreign visitors to
February 28 research note from Teneo. natural gas, hard coal, iron-steel products, Turkey in 2021, with 4.7 million people,
It concluded: “Ankara has limited unprocessed aluminium and various while Ukraine was the third-largest source
capacity to weather economic shocks and agricultural products from Russia, said of tourists at 8.3% with 2 million people.”
no appetite for undermining economic Teneo. The Russian economic downturn could
relations with either Ukraine or Russia.” Turkey stands as the largest importer of also affect the activity of Turkish contractors
Turkey imports almost all of its required agricultural products from Russia. Total in Russia, Teneo pointed out, saying:
oil and natural gas, with around 40-45% imports of agricultural products from “According to the Turkish Contractors
of the latter coming from Russia. Each Russia stood at $4.3bn last year, while in Association, Turkish firms are currently
$10 increase in the price of a barrel of oil terms of agricultural product imported engaged in more than 100 construction sites
costs the country at least around $4bn from Russia, the big item is wheat. In 2021, in Russia, and the volume of these contracts
in additional import costs, widening its Turkey imported 6.7mn tonnes of wheat. is worth around USD 20bn. In the 1972-
current-account deficit, Teneo observed. In Trade Ministry data showed 64.6% of 2021 period, the majority of international
the last 12 months, Turkey's energy imports Turkey's wheat import derives from Russia contracting projects carried out by Turkish

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