PARIS ( Associated Press) – French energy giant TotalEnergies said Friday it would divest its stake in Russian natural gas producer Novatek and take a $3.7 billion loss.
TotalEnergies, which has been criticized for continuing with its projects in Russia despite the war in Ukraine, said Western sanctions prevented it from selling its 19.4% stake to a Russian company. He indicated he was already removing his representatives from the Novatek board of directors, who abstained from voting because of the sanctions, with “immediate effect”.
As a result, TotalEnergies will no longer account for its stake in Novatek, which will lead it to “record an impairment loss of approximately $3.7 billion in the accounts for the fourth quarter of 2022,” the French company said in a statement.
According to its “Principles of Conduct” published on March 22, TotalEnergies has “started to gradually withdraw from its Russian assets, while ensuring it continues to supply gas to Europe.”
It comes amid an energy crisis in Europe triggered by Russia’s war in Ukraine that has driven up natural gas prices and prompted governments to warn people to save fuel this winter. While prices have fallen from summer peaks and Europe has stocked up for the season, a colder-than-expected winter, an outright gas cut by Russia and other factors could lead to supply shortfalls.
Environmental NGO Greenpeace France said the announcement comes “too late” and condemned Total Energy’s continued operations in Russia.
The French company has interests in other Russian projects aimed at producing liquefied natural gas, including a 20% stake in Yamal LNG and a 10% stake in Arctic LNG.
Other companies that have pulled out of Russia have incurred heavy losses, ranging from Shell’s $3.9 billion cost to McDonald’s estimated at $1.4 billion.