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26 Aug 2022

Tassilo Hummel, Reuters

TotalEnergies sells stake in Siberia gas field to Novatek after accusations of providing Russian military warplanes with kerosene

TotalEnergies sells stake in Siberia gas field to Russia's Novatek, 26 August 2022

TotalEnergies is selling its stake in a Siberian gas field, owned in a joint venture with Novatek, to the Russian oil and gas company, the French energy major said...amid criticism over its business dealings in Russia...A spokesperson declined to comment on whether it would do anything with its 19% share in Novatek itself, or any of its other businesses in the country...

The development will be viewed as a small positive by TotalEnergies' peers such as BP (BP.L) or Shell (SHEL.L), who have been stuck with tens of billions worth of assets in Russia and have struggled to find buyers.

Regarding the sale of its stake in Terneftegaz, which operates the Termokarstovoye gas and condensates field in Siberia, "closing (of the deal) is expected in September 2022, subject to customary conditions," TotalEnergies said in a statement.

The announcement came after days of controversy over Terneftegaz, which Le Monde newspaper said supplied condensate gas which was later transformed to kerosene used in two Russian army bases.

TotalEnergies said that the divestment had been planned before the controversy emerged.

"On July 18, 2022, TotalEnergies agreed to sell to Novatek TotalEnergies' 49% interest in Terneftegaz...on economic terms enabling TotalEnergies to recover the outstanding amounts invested in the field," it said...

In a separate statement, TotalEnergies confirmed it and Novatek jointly produce gas condensate in Russia that ends up in jet fuel, but said that it was all for export...

TotalEnergies decided in July to sell the remaining 20% interest it held in the Kharyaga oil field, in what was its first major divestment in Russia in the wake of Western sanctions over Moscow's invasion of Ukraine...It still has minority stakes in a number of non-state-owned Russian companies: Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%).

Part of the following timelines

Ukraine: Global outrage over Russian invasion leads to sanctions, demands for businesses to divest

TotalEnergies accused of supplying fuel to Russian warplanes; co. denies accusations