TotalEnergies sells its 49% stake in Russian oil company Terneftegaz to Novatek

French energy company says it will ensure strict compliance with European sanctions

TotalEnergies said it will no longer provide capital for new projects in Russia. Reuters
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French energy company TotalEnergies will sell its stake in Terneftegaz, one of the largest Russian oil companies, to Novatek, it announced on Friday.

TotalEnergies signed the final sale and purchase agreement with Novatek, the largest independent natural gas producer in Russia, for its 49 per cent interest in Terneftegaz.

The deal is expected to be closed next month, subject to customary conditions.

Further financial details of the deal were not disclosed.

“TotalEnergies agreed to sell to Novatek TotalEnergies' 49 per cent interest in Terneftegaz, which operates the Termokarstovoye gas and condensates field in Russia, on economic terms enabling TotalEnergies to recover the outstanding amounts invested in the field,” the French company said in a statement.

“Pursuant to Russian regulations, a request to authorise this transaction was addressed to the Russian authorities on August 8 … on August 25, Russian authorities issued their agreement to the proposed sale,” it said.

TotalEnergies condemned Russia's military offensive against Ukraine and said it would ensure strict compliance with current and future European sanctions, “no matter what the consequences on the management of its assets in Russia”.

In March, TotalEnergies said it would no longer provide capital for new projects in Russia following Moscow's invasion of Ukraine in late February.

However, the company said it will contribute to securing Europe’s gas supply from the Yamal LNG plant “within the framework of long-term contracts that it must honour as long as Europe's governments do not take sanctions on Russian gas”.

TotalEnergies also said it would gradually suspend activities in Russia which do not contribute to the security of energy supply of Europe.

“This included assets producing oil [Kharyaga field] and gas for the local Russian market [Termokarstovoye field] as well as other local businesses [lubricants, batteries] which were mothballed in the first half of the year,” the company said.

Last month, the company announced the sale of its remaining 20 per cent interest in the Kharyaga oil project to Moscow-based state-controlled oil company Zarubezhneft. The transfer was finalised on August 3.

Updated: August 26, 2022, 5:57 PM