TotalEnergies quits Russia’s Kharyaga oil project in wake of sanctions

PARIS, France – TotalEnergies has agreed to transfer its remaining stake in Russia’s Kharyaga oil field to the country’s state producer Zarubezhneft, the French company told Reuters, in its first major divestment in Russia in the wake of Western sanctions.

“TotalEnergies has agreed to transfer to Zarubezhneft the remaining 20% interest that the company held in the Kharyaga oil field,” a spokesperson for TotalEnergies told the news agency on Wednesday, July 6.

“This transaction is subject to the approval of the Russian authorities,” the spokesperson said, without elaborating on the terms of the stake transfer.

The Kharyaga oil project is operated under a product sharing agreement. As part of the agreement, TotalEnergies received some 100,000 metric tons of oil for exports every month.

According to two sources in Russian oil trading, TotalEnergies did not act as the seller of that volume in June, but Zarubezhneft did instead.

TotalEnergies had been a part of the Kharyaga oil project for over 20 years along with Norway’s Equinor, which quit earlier this year.

TotalEnergies said in March that it would not renew its Russian gasoil and crude oil supply contracts for its German refinery, but would source gasoil from Saudi Arabia and crude via Poland instead.

The French oil major, which has faced criticism for stopping short of joining rivals Shell and BP in divesting oil and gas assets in Russia, still has minority stakes in a number of non-state-owned Russian companies: Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%), and TerNefteGaz (49%).

It has said it could exit Russia if it had to because of sanctions, which have already caused it to book a $4.1-billion impairment. – Rappler.com