The energy giant said Western sanctions would affect an Arctic natural-gas project that had been expected to launch next year
Unlike other major oil companies BP PLC, Shell PLC and Exxon Mobil Corp.
Total hasn’t said it would exit its Russia holdings following the invasion.
Shell said earlier this month it expects to book accounting charges of up to $5 billion in the first quarter related to its decision to exit its Russia operations, including joint ventures with energy giant Gazprom PJSC. BP has warned that its Russia exit could result in potential losses, including write-downs and charges, totaling up to $25 billion.
The companies haven’t spelled out how they will divorce themselves from Russia holdings, following decades of business collaboration in the country.
Rather than an exit, Total has pledged to curtail its Russian energy purchases—ending its buying of Russian oil and petroleum products by the end of this year—while complying with sanctions.
“Abandoning these interests without consideration would enrich Russian investors, in contradiction with the sanctions’ purpose,” the company said in March.
Total’s multibillion-dollar write-down, announced a day before its scheduled first-quarter earnings report, reflects a decision that it can no longer count on anticipated reserves from Arctic LNG 2. Total said sanctions have starved the project of technology and goods crucial to production.
The company repeated last month that it would provide no new capital for projects in Russia. It also said it plans to gradually suspend its Russia activities while keeping its workforce safe, but didn’t say it will withdraw from minority stakes in a number of Russian energy operators.
Total holds a roughly 20% stake in Russian producer OAO Novatek, a privately held gas company run by a close associate of Russian President Vladimir Putin. The partners’ Arctic LNG 2 project, once valued at about $21 billion, had been expected to launch in 2023 and eventually reach full capacity of almost 20 million tons.
Total has said it would continue taking gas from another Russian project that began shipping in 2017, as long as European governments previously consider Russian gas necessary.
Write to Jenny Strasburg at [email protected]
Credit: www.wsj.com /