Total withdraws directors from Novatek, writes down US$3.7Bn

As a result, Total’s 19.4% stake in Novatek will no longer be reflected in the company’s accounts and it said this will result in an impairment of approximately US$3.7Bn in the balance sheet for Q4 2022. But neither can the company sell its stake 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 addition, the company will no longer book reserves for its interest in Novatek, with an impact on the company’s reported proved reserves at the end of 2021. Total did not comment on the status of the dividends it receives from the stake it currently holds.

The French oil major is still exporting LNG to Europe from its Yamal plant, as that is allowed under Western sanctions.  

The first train at Novatek’s 20-mta Arctic LNG-2 project is still on track to begin next December. Speaking at the Eurasian Economic Forum in October, Novatek chief executive Leonid Mikhelson said the project was 70% complete.

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