London — TotalEnergies (TTEF.PA) condemned what it called Moscow’s military aggression in Ukraine but stopped short on Tuesday of joining rivals Shell (SHEL.L) and BP in planning to exit positions in resource-rich Russia.
The French oil major, which holds a 19.4% stake in Novatek (NVTK.MM), Russia’s largest producer of liquefied natural gas, said it “will no longer provide capital for new projects in Russia”.
“TotalEnergies supports the scope and strength of the sanctions put in place by Europe and will implement them regardless of the consequences (currently being assessed) on its activities in Russia,” it said in a statement.
Shares in TotalEnergies were down about 3% lower at 44.23 euros, underperforming the European oil and gas equity index <.SXEP > which was trading down 0.9 % at 1110 GMT.
“We are somewhat surprised that TTE didn’t follow Shell and BP and signal intentions to exit Russia,” said RBC equity analyst Biraj Borkhataria.
TotalEnergies announced in January it was pulling out of Myanmar almost a year after a coup there. In 2018 it had to drop its involvement in Iran’s South Pars gas field after it failed to receive sanctions waivers for the project.
Earlier, French Finance Minister Bruno Le Maire had said he would be holding discussions with the heads of TotalEnergies and energy company Engie about their business interests in Russia.
“I believe there is a question of principle in working with any political or financial person close to Russian power,” Le Maire told France Info radio.
Russia constituted 24% of TotalEnergies proven reserves and 17% of its oil and gas production in 2020. The Yamal LNG project in northern Russia launched production in late 2017.
Shell, by contrast, which on Monday said it would exit its Russian projects, including the giant LNG Sakhalin-2 plant, has benefited from gas sales from Sakhalin for over 10 years and has seen its investment mostly paid out.
In addition to its stake in Novatek, the French company also has a 20% stake in the Yamal LNG project as well as a 10% interest in Arctic LNG 2, which is scheduled to start production next year.
“(TotalEnergies’) position is more entrenched than peers given it includes the combination of the Novatek shareholding, operating projects like Yamal and projects under construction like Arctic LNG 2. It would be a more complex process, than for BP, and that’s not exactly straight forward either,” Borkhataria said.
Engie is connected to Russia via the Nord Stream 2 gas pipeline.
Le Maire said the European Union and United States were unleashing an “economic war” on Moscow that would “provoke the collapse of the Russian economy”.
The decisions by BP and Shell have piled pressure on Western companies with stakes in Russia, and more are expected to pull out on Tuesday as sanctions tighten with a huge Russian military convoy approaching the Ukrainian capital of Kyiv.
TotalEnergies said it was mobilised to provide fuel to the Ukrainian authorities and aid to Ukrainian refugees in Europe.
*Benjamin Mallet, Sudip Kar-Gupta & Sarah Morland, Shadia Nasralla; Richard Lough; Editing: Jason Neely & Louise Heavens – Reuters
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