TotalEnergies withdraws from NOVATEK’s board of directors

French oil and gas company TotalEnergies has announced that it is withdrawing its representatives from NOVATEK’s board of directors and will no longer account for its 19.4% stake in the Russian company. This will result in a $3.7 billion impairment of TotalEnergies in the fourth quarter, it said. press office French company.

Two directors representing TotalEnergies are forced to abstain from voting at NOVATEK’s board meetings, in particular on financial matters, due to European sanctions in place since the start of the military operation, the press release says. “Under these conditions, the Board of Directors of TotalEnergies decided to immediately withdraw the company’s representatives from the Board of Directors of NOVATEK,” the company concluded.

As a result, TotalEnergies can no longer account for its 19.4% stake in the Russian company, the press service said. At the same time, the company also cannot sell its stake to another shareholder of NOVATEK due to sanctions, the report says.

This will result in an impairment charge of about $3.7 billion in the fourth quarter of 2022, the press release said. In addition, the company added that it would no longer take into account reserves in relation to its stake in NOVATEK, which will affect the company’s reported proved reserves at the end of 2021 (1.7 billion barrels).

November 18 TotalEnergies announcedthat will exit the Russian market gradually and maintain a presence in Russia in order to provide energy supplies to Europe. The head of the company, Patrick Pouyanne, noted that as soon as Europe decides to impose sanctions against Russian gas, the company will terminate this contract.

TotalEnergies is the fourth largest oil and gas company in the world after Royal Dutch Shell, British Petroleum and ExxonMobil. It operates in more than 130 countries around the world. In Russia, the company also owns 20% in Yamal LNG and 10% in Arctic LNG-2.

Erdni Kagaltynov