While nothing has so far forced TotalEnergies to cease its activities in Russia, pressure is mounting for the French energy company to do so, by aligning itself with other Western groups in the sector.
From BP to Eni, via Shell.
If TotalEnergies clings so much to Russia, it is because of natural gas, at the heart of the group's new strategy, and of which Russia has significant resources.
Particularly in the Russian Arctic where exploitation is just beginning.
TotalEnergies has already placed its pawns there.
It holds 19.4% of the capital of Novatek, the second largest Russian gas producer, as well as in operating projects.
Russia already accounts for 30% of its current global gas production.
On February 27, BP announced that it was selling its nearly 20% stake in the Russian oil company Rosneft in response to the invasion of Ukraine.
The next day, Shell, the other British giant in the sector, separated from its shares in several joint projects with Gazprom in Russia, including the gigantic Sakhalin-2 gas project.
A week later, Shell still added that it would withdraw Russian hydrocarbons from its supplies as soon as possible.
The Norwegian sovereign wealth fund Equinor, the American ExxonMobil, the Italian Eni complete the list of energy players to announce their withdrawal from Russia since the start of the war in Ukraine.
TotalEnergies is not there.
The French company condemned the Russian military aggression via a press release on March 1, and pledged to no longer contribute capital to new projects in the country.
But she is not giving up her current business in Russia.
Russia, essential in Total's new strategy
This business is big.
Russia already represents, for TotalEnergies, 17% of its world hydrocarbon production.
"But the country's strategic stake for the French company is not so much linked to oil as to natural gas", indicates Patrice Geoffron, professor of economics at Paris-Dauphine and director of the Center for Geopolitics of Energy and raw materials (CGPEM).
This energy is at the heart of the group's new strategy, unveiled when it changed its name from Total to TotalEnergies a year ago.
To the chagrin, by the way, of NGOs, who denounce a case of “greenwashing”.
“Total suggests that it is going to turn resolutely towards renewable energies, begins Juliette Renaud, head of the campaign “Regulation of multinationals” at Friends of the Earth.
In reality,
Above all, he intends to develop natural gas, a fossil fuel which he presents as transitional.
This development necessarily passes through Russia, whose gas resources are colossal and could still grow in the future, as deposits become accessible in the Russian Arctic.
TotalEnergies has already placed its pawns there.
It owns 19.4% of Novatek, a private Russian company, the country's second largest natural gas producer.
"It is not content to be in its own capital but is associated with it for gas exploitation projects in Russia", recalls Juliette Renaud.
Yamal LNG… while waiting for Arctic LNG2
This is the case of Yamal LNG, a company 50.1% owned by Novatek and 20% by TotalEnergies.
It was created from scratch to exploit the Tambey South gas field, northeast of the Yamal Peninsula, in the Arctic Circle.
Production started in November 2017 and is scheduled to release 16.5 million tonnes of liquefied natural gas (LNG) per year, then transported by LNG carriers to "European and Asian customers, engaged in contracts of fifteen to twenty years," says TotalEnergies.
“Russia already accounts for 30% of TotalEnergies' global gas production and 40% of its reserves,” says Juliette Renaud.
Just a start, because the oil company is also involved in ArcticLNG 2, another gas field exploitation project.
Always in Siberia, always with Novatek, and always beyond the Arctic Circle.
But this time on the Gydan peninsula, and with the objective of releasing 19.8 million tonnes of LNG per year.
Production should start in 2023. This will therefore increase the financial windfall of TotalEnergies in Russia, especially since not everything is limited to Arctic LNG 2. “In 2018, TotalEnergies secured a direct stake of between 10 and 15% in all future Novatek LNG projects.
Particularly in the Russian Arctic, where other deposits are hoped to be exploitable,
resumes Juliette Renaud.
Russia thus represents more than 50% of Total's gas reserves to be developed in the future.
»
Pressures that build up
Admittedly, nothing is forcing TotalEnergies to withdraw from its Russian projects, despite the economic sanctions taken against Moscow.
Bruno Le Maire recalled it on Monday on LCI.
All the same, the Minister of the Economy does not rule out a hardening of these sanctions and publicly questioned himself, at the beginning of March, on “the problem of principle to work with any political or economic personality close to the Russian power”.
Friends of the Earth and Greenpeace don't want to wait.
On Tuesday, the two NGOs gave TotalEnergies formal notice “to cease as soon as possible any activity in the oil and gas sector likely to finance the war led by Russia in Ukraine”.
They point to the fact that “Total cannot ignore that its business relations with Novatek and its investments in Russian oil and gas projects contribute to financing the Kremlin's war effort”.
The two NGOs rely on the law on the duty of vigilance passed in 2017. "It requires French companies with more than 5,000 employees to identify and prevent the risks of serious violations of human rights and the environment that may their activities or those of their subsidiaries", explains Juliette Renaud.
The first step provided for by this text is that of the formal notice, thus giving time to the company concerned to bring itself into compliance.
“TotalEnergies has three months to respond.
If it is unsatisfactory, we will take the group to court,” warns Juliette Renaud.
📣 The @amisdelaterre and @greenpeacefr put @TotalEnergies on notice to cease as soon as possible its activities likely to finance the war led by Russia in Ukrainehttps://t.co/2HWXyZAJqO
— Friends of the Earth FR (@amisdelaterre) March 15, 2022
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“We will manage”
Could these pressures bend TotalEnergies?
Difficult to speculate, answers Patrice Geoffron.
"Everything will depend on the duration of the conflict and, if a settlement occurs, the conditions that will be made to Ukraine," he explains.
Anyway, if there is a withdrawal, it will be more painful than for other Western companies to have done so.
“Some of them only had supply or partnership contracts,” continues the economist.
It's easier to draw a line under it than on a stake in the capital of a company like Novatek for Total.
BP was in this situation before selling its 20% stake in Rosfnet.
But since Russia invaded Crimea in 2014, this involvement has come under increasing criticism in the UK and pressure from the government.
Words that it is unlikely to hear from the mouth of Patrick Pouyanné, CEO of TotalEnergies?
“Such a withdrawal would weaken Total's ability to be a leading player in LNG.
And probably also, in the longer term, its ability to import carbon-free hydrogen from Russia,” anticipates Patrice Geoffron.
These are two axes at the heart of its new strategy.
Russia, "it's 3% to 5% of TotalEnergies' revenues, we will manage", slipped in any case Patrick Pouyanné, on February 24, when asked about the economic impacts of the war which had just broken out on his group.
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An attachment to Russia that is reminiscent of past situations?
TotalEnergies' reluctance to leave Russia is reminiscent of the situation in 2014, when a series of economic sanctions were imposed on Moscow after the annexation of Crimea.
Sanctions that TotalEnergies then contested.
In December 2014, a few hours before his disappearance in a plane crash, Christophe de Margerie [the predecessor of Patrick Pouyanné] had spoken with the then Prime Minister, Dimitri Medvedev, on this subject, tells
Le Monde.
Christophe de Margerie then considered these sanctions “unfair and counterproductive”.
Also in 2014, Total succeeded in obtaining financial support from the French government, via the export guarantee mechanism, for the Yamal LNG project.
Present in more than 130 countries, this is not the first time either that Total maintains or has maintained activities in the grip of armed conflicts or governed under authoritarian regimes that attack human rights, deplore Les Amis de la Earth and Greenpeace.
Juliette Renaud cites Mozambique, Uganda, Yemen, but also, until recently, Burma.
Last January, TotalEnergies announced its withdrawal from the country, almost a year after the coup d'etat and the resumption of power by the military junta.
The group was then the subject of strong criticism, particularly from NGOs, for having maintained its activities there.
TotalEnergies
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