CorporateEuropeLNG Terminals

TotalEnergies to take $3.7 billion hit as it writes down Novatek stake

By LNG Prime Staff
TotalEnergies to take $3.7 billion hit as it writes down Novatek stake
Yamal LNG (Image: Novatek)

French energy giant TotalEnergies said it would take a $3.7 billion hit in its fourth-quarter results for the write-down of its stake in Russian LNG producer Novatek.

TotalEnergies holds a 19.4 percent interest in Novatek. It also holds a 10 percent stake in the Arctic LNG 2 development, as well as a 20 percent in Novatek’s Yamal LNG project.

Earlier this year, TotalEnergies said it would continue to supply LNG from the Yamal plant to Europe, but it would not provide any more capital for the Arctic LNG 2 project. The firm also booked a $4.1 billion impairment charge on Arctic LNG 2.

Besides the write-down of the stake, TotalEnergies has decided to withdraw the representatives of the company from the board of Novatek with immediate effect, it said in a statement on Friday.

TotalEnergies said it cannot sell the stake in Novatek given the prevailing shareholders’ agreements, as it is forbidden for TotalEnergies to sell any asset to one of Novatek’s main shareholders who is under sanction.

“In view of the European sanctions in force since the beginning of the war, the two directors representing TotalEnergies on the board of directors of Novatek are led to abstain from voting in meetings of the board of directors of this company, in particular on financial matters,” the firm said.

“They are therefore no longer in a position to fully carry out their duties on the board which might become an issue for the governance of this company,” it said.

Under these circumstances, the board of directors of TotalEnergies has decided to withdraw the representatives of the company from the board of Novatek, TotalEnergies said.

These actions would lead to record an impairment of about $3.7 billion in the accounts for the fourth quarter of 2022.

In addition, TotalEnergies said it would no longer book reserves for its interest in Novatek, with an impact on the company’s reported proved reserves at the end of 2021 of 1.7 billion of barrels.

However, the life duration of the company’s proved reserves would remain above 11 years of production, the company added.

Most Popular

Contracts and Tenders

Colombia’s Ecopetrol ditches LNG import tenders

Colombia’s state-owned energy firm Ecopetrol has rejected five-year liquefied natural gas (LNG) supply offers, saying that the minimum commercial conditions were not met.
Contracts and Tenders

Petrovietnam units plan new LNG-to-power project

PV Power and PV Gas, units of state-owned Petrovietnam, signed cooperation agreements to secure gas supplies for power plants in southwestern Vietnam and explore developing an integrated liquefied natural gas (LNG) project in the northern port city of Hai Phong.
Contracts and Tenders

Tecnicas Reunidas scores LNG Canada pipeline gig

Shell-led LNG Canada has awarded a contract to Spanish engineering and construction firm Tecnicas Reunidas to provide EPCM services for the second phase of the Coastal GasLink pipeline in British Columbia, on Canada’s west coast.

More News Like This

Corporate

TotalEnergies expects Q3 LNG results to rise sharply

French energy giant TotalEnergies, one of the world’s largest LNG players, expects its integrated LNG results to rise sharply in the third quarter compared to the prior quarter, driven by higher prices.
Corporate

Novatek’s gas sales down in Q3

Russian LNG exporter Novatek reported lower natural gas sales, including LNG, in the third quarter this year than in the same period last year.
LNG Terminals

PV Gas in LNG supply talks with Novatek

Petrovietnam Gas, a unit of state-owned Petrovietnam, is in talks with Russian producer Novatek to buy liquefied natural gas (LNG) from the latter as part of its plans to diversify its LNG supply sources.
LNG Terminals

TotalEnergies plans second Mozambique LNG phase

French energy giant TotalEnergies plans to expand its Mozambique LNG project, currently under construction in Cabo Delgado province, with a second phase, according to management.