TotalEnergies to stop buying Russian oil, investing in Arctic LNG 2
MOSCOW. March 23 (Interfax) - France's TotalEnergies , one of the largest investors in Russia's energy sector, announced on Tuesday that it has decided to stop buying Russian crude oil and oil products and suspend investment in the Arctic LNG 2 project.
"[G]iven the worsening situation in Ukraine and the existence of alternative sources for supplying Europe, TotalEnergies has unilaterally decided to no longer enter into or renew contracts to purchase Russian oil and petroleum products, in order to halt all its purchases of Russian oil and petroleum products as soon as possible and by the end of 2022 at the latest," the company said in a statement.
TotalEnergies said has term contracts to purchase Russian oil and oil products that expire by the end 2022. These contracts primarily cover supplies for the Leuna refinery in eastern Germany, which is served by the Druzhba pipeline from Russia. They also concern Europe's gasoil supply, which is short of this product.
TotalEnergies said it will terminate its Russian oil supply contracts for the Leuna refinery as soon as possible and by the end of 2022 at the latest, and will put in place alternative solutions by importing oil via Poland.
"Concerning the gasoil shortfall in Europe, absent any instructions to the contrary from European governments, TotalEnergies will also terminate its Russian gasoil purchase contracts as soon as possible and by the end of 2022 at the latest. TotalEnergies will import petroleum products from other continents, notably its share of gasoil produced by the Satorp refinery in Saudi Arabia," the company said.
TotalEnergies has also decided to suspend investment in projects in Russia, including Arctic LNG 2. The company said it will "no longer record proved reserves for Arctic LNG 2 in its accounts and will not provide any more capital for this project."
TotalEnergies recalled that it does not operate any oil and gas fields or any liquefied natural gas plants in Russia. It is a minority shareholder in a number of non-state-owned Russian companies: Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%) and TerNefteGaz (49%). These companies are managed by their own staff with a limited number of secondees from TotalEnergies. TotalEnergies is also a 20% partner in the Kharyaga joint venture operated by Zarubezhneft.
"TotalEnergies had only 11 secondees in these companies as of February 24, 2022, and only 3 seconded expatriates are in Russia as of today. TotalEnergies has thus initiated the gradual suspension of its activities in Russia, while assuring its teams' safety. Similarly, TotalEnergies has decided to put on hold its business developments for batteries and lubricants in Russia," the company said.