French energy group TotalEnergies pulls out of Russia gas firm’s board with $3.7bn write-down

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French energy group TotalEnergies announced on Friday (December 9) that it will exit the board of Russian gas giant Novatek. The firm also said that it would take a $3.7 billion hit to write off the value of its stake in the Russian group. 

In the aftermath of Russia’s invasion of Ukraine, the West imposed sanctions on Moscow, which was followed by several Western oil and gas majors exiting Russia. 

TotalEnergies faced criticism for maintaining investments in Russia but now, the company has said in a statement that it cannot sell its stake in the Russian gas firm as “it is forbidden for TotalEnergies to sell any asset to one of Novatek’s main shareholders who is under sanction”.

In a statement, the Paris-based oil-and-gas giant said: “In view of the European sanctions in force since the beginning of the war, the two directors representing TotalEnergies on the board of directors of Novatek are led to abstain from voting in meetings of the board of directors of this company, in particular on financial matters.” 

WATCH | WION Fineprint: How long can the West keep supplying Ukraine? 

“Under these circumstances, the board of directors of TotalEnergies has decided to withdraw the representatives of the company from the board of PAO Novatek with immediate effect,” the statement added. 

It said it would also “no longer equity account for its 19.4 per cent stake in Novatek”, which in turn will result in TotalEnergies recording an impairment of approximately $3.7 billion in the fourth quarter. 

Notably, TotalEnergies is a minority shareholder in other Russian ventures, including the massive Yamal LNG gas field in Siberia and the Arctic LNG 2 project. 

(With inputs from agencies) 

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