TotalEnergies Held Talks With French Government on Russia Assets

(Bloomberg) -- TotalEnergies SE has held talks with the French government over its continuing operations in Russia, after BP Plc and Shell Plc announced they would exit the country.

The French government has been discussing the issue and TotalEnergies Chief Executive Officer Patrick Pouyanne is “perfectly aware of the gravity of the situation,” French Finance Minister Bruno Le Maire said in an interview on CNews Television on Tuesday. “It is a question of principle.”

A decision on the company’s operations in Russia will be taken over the coming days, Le Maire said. The government has also held talks with Engie SA over its links with the country, but that situation is “a little different,” he said. 

TotalEnergies didn’t immediately respond to a request for comment. 

In just two days, some of Europe’s largest energy companies dumped tens of billions of dollars of Russian investments that they had nurtured over decades and shut themselves out of the world’s largest energy exporter, probably forever. 

Shell’s move to exit a stake in the Sakhalin-2 LNG project, an investment that dates back to the Yeltsin era, follows BP Plc’s announcement on Sunday that it will walk away from a holding in Russia’s state oil producer, Rosneft PJSC. The moves by the British companies -- and from Norway’s Equinor ASA -- show just how far Western powers are willing to go to punish President Vladimir Putin for his invasion of Ukraine. 

Their decisions put pressure on remaining foreign investors, including Exxon Mobil Corp. and TotalEnergies, to follow suit as Russia’s war in Ukraine forces a dramatic rupture with the global economy.

TotalEnergies has operations in Russia representing around $1.5 billion of its total cash flow, or around 5%. It owns roughly a fifth of gas producer Novatek as well as a large interest in the Yamal LNG project, Russia’s biggest producer of liquefied natural gas. It also has a 10% in the future Arctic LNG 2 development.

Engie’s main Russian connection is a stake in the Nord Stream gas pipeline, and a loan it provided to Nord Stream 2, a project that has already been suspended by the German authorities. 

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