Page 16 - RusRPTJul23

TotalEnergies
The French hydrocarbons major TotalEnergies remains a
partner of leading Russian LNG producer Novatek and an investor in its LNG
projects, which are a key source of income for the Kremlin.
However, while many international companies were quick to publicly pull the
plug on their Russian business, TotalEnergies CEO Patrick Pouyanne has
refused and defended the company's decision to remain in Russia as well as
receiving dividends from its projects there. He justified the decision by saying
“the rest of the world feels differently to the West regarding the conflict [in
Ukraine].”
“The vision which we have of this conflict in the Western camp is by
no means shared by the vast majority of the rest of the world,” Pouyanne said
on November 9, addressing the foreign affairs committee of the French
parliament.
TotalEnergies has collected around $748mn in dividends from its projects in
Russia during the first nine months of the year of last year and unlike most of
its peers, has resisted calls to declare its intention to withdraw from Russia. In
a compromise, the company has said that it will not make any new investments
and will “gradually wind down” its operations there.
TotalEnergies booked a $3.7bn impairment on its 19.4% interest in Novatek in
December. In a statement on December 9, TotalEnergies said it would no
longer account for the equity stake in Novatek on its books. It will also remove
1.7bn barrels of oil from its proven reserves, but noted this would still leave the
company with enough reserves to maintain current output for over 11 more
TotalEnergies
company has stakes in the operational Yamal LNG terminal and the
uncompleted Arctic LNG-2 project in the Russian Arctic, and also has a
shareholder position in both facilities’ operator Novatek. It has shed some of its
minor interests in Russia, however, including a 20% stake in the Kharyaga
oilfield and a 49% stake in the Terneftegaz joint venture in
Russia’s north.
The Austrian bank Raiffeisen International Bank (RBI) was a pioneer in
the Russian banking sector and made a fortune financing trade with the West
in the 1990s before setting up a substantial retail banking business that lifted
the bank into the major international banking league.
Since the war started over a year ago, RBI has kept its access to SWIFT
despite the SWIFT sanctions that were imposed only days after Russia’s
invasion of Ukraine in February and seen a 2.7-fold increase in profits in the
last year.
The bank has come under considerable pressure to exit the market but has
been very reluctant to do so. Most recently RBI has reportedly stopped
opening new accounts in Russia over fears that it provides a safe haven for
syphoning FX cash overseas, but continues to serve existing accounts.
years.
added that it could not sell the interest in Novatek, “given the prevailing shareholders’ agreements, as it is forbidden for [the company] to sell any asset to one of Novatek’s main shareholders who is under sanction.” The
RBI
16 RUSSIA Country Report July 2023 www.intellinews.com