French energy giant transfers its 10% stake to a Novatek subsidiary but retains claims to $1.3 billion in outstanding loans…..
French energy giant TotalEnergies has completed its withdrawal from Russia’s Arctic LNG 2 project, ending its shareholding in the sanctions-hit venture following Moscow’s invasion of Ukraine.
The company announced on Thursday that it had transferred its 10 percent stake in the liquefied natural gas project to NordLine, a subsidiary of Russian gas producer Novatek, the majority shareholder in the venture.
“TotalEnergies confirms that the transfer of its 10 percent interest in Arctic LNG 2 to NordLine, a Novatek subsidiary, has been completed,” the company said in a statement.
“TotalEnergies is therefore no longer a shareholder.”
The transaction follows an announcement by the company’s chief executive, Patrick Pouyanné, in July that TotalEnergies planned to transfer its stake in the project after receiving the necessary approval from Russian authorities.
TotalEnergies had already recorded a $4.1 billion write-down on its investment in Arctic LNG 2 in 2022, following Russia’s invasion of Ukraine and the wave of Western sanctions that followed.
Despite relinquishing its stake, the French energy company said it still has the right to recover approximately $1.3 billion in loans provided to the Arctic LNG 2 project alongside other shareholders.
However, it acknowledged that repayment is unlikely in the immediate future.
“Such reimbursement might be implemented in the future subject to applicable sanctions,” the company said.
The exit marks another step in TotalEnergies’ efforts to reduce its exposure to Russia, where Western sanctions and restrictions on commercial activity have made it increasingly difficult for foreign companies to maintain or dispose of their investments.
While several Western companies moved quickly to sell or isolate their Russian assets following the invasion of Ukraine, Moscow has imposed restrictions that have complicated the departure of foreign investors.
Under the current rules, certain transactions involving foreign companies require approval from the Russian president.
Novatek has been TotalEnergies’ key business partner in Russia for years. The two companies jointly developed the Yamal LNG project, launched in 2013, which produces liquefied natural gas from fields in Siberia for export to international markets, including Europe.
TotalEnergies continues to hold a 19.4 percent stake in Novatek and a 20 percent interest in the Yamal LNG project.
The company has previously said it is unable to sell its stake in Novatek under the current sanctions regime.
