Date: 20 December 2022 Author: Grzegorz Kuczyński

TotalEnergies, Shell Quit Joint Russian Energy Projects

Dozens of Europe’s biggest companies have abandoned their operations in Russia. But regulations and deals in force slow down the procedure of quitting the country. Importantly, Western firms abandon joint projects with both state-run and private companies throughout Russia.

SOURCE: ПАО НОВАТЭК Пресс-центр : Фотогалерея (novatek.ru)

French oil giant TotalEnergies announced its decision to withdraw its representatives from the board of Russian gas company Novatek after it said it would walk away from Russian stakes back in March 2022. The French company said it cannot sell its 19.4 percent stake in the Russian firm as “it is forbidden for TotalEnergies to sell any asset to one of Novatek’s main shareholders who is under sanction”. TotalEnergies said in a statement that the two directors have had to abstain from voting in board meetings due to the European sanctions. They are therefore no longer in a position to fully carry out their duties on the board that might become an issue for the governance of this company. Under these circumstances, the board of directors of TotalEnergies has decided to withdraw the representatives of the company from the board of Novatek with immediate effect. As a result, the criteria for significant influence no longer being met within the meaning of the accounting regulations that apply to the company, TotalEnergies will no longer equity account for its 19.4 percent stake in Novatek in the company’s accounts. This will lead to record an impairment of approximately $3.7 billion in the accounts for the fourth quarter of 2022. Gazprom Neft subsidiary asks court to reverse order restricting the supermajor’s rights to sell stake in the Salym joint venture in West Siberia. Consequently, the Russian firm could be eligible for purchasing shares. The court is set to convene on December 22 to consider and rule on the Salymskiye Proyekty request. In August, a Russian court ruled that Salym Petroleum Development, a joint venture between Shell and Gazprom Neft, should be transferred to Russian jurisdiction. Gazprom Neft had asked to suspend its partner’s right to vote at the shareholders’ meeting or dispose of its shares by the end of 2023. In May, Shell ended an exploration partnership with Gazprom called Gydan. Salym Petroleum Development, established in 1996 is a joint venture between Gazprom Neft and Shell for the development of the Salym group of oil fields in Western Siberia.

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