Total Energies makes $4.1 bn writedown on Russian gas project

French power firm TotalEnergies said Wednesday it had taken a $four.1 billion impairment rate on its Arctic LNG 2 gasoline undertaking below production in northern Russia.

On the eve of reporting its first-region outcomes, the firm said extra sanctions followed with the aid of European government, “extensively prohibiting export from European Union international locations of goods and era to be used in the liquefaction of herbal gas benefitting a Russian company… Constitute additional risks” at the mission’s execution.

Therefore, it said it had determined to file the $4.1 billion impairment price as of March 31 in its first-zone consequences.

A spokesman said this signaled the “beginning of a retreat” from the project.

“TotalEnergies has drawn conclusions from what’s happening. This four billion charge shows that TotalEnergies is starting to turn the page” on the investment, said the spokesman.

TotalEnergies took a stake in the project in 2019, making it its second in Russia’s extreme north alongside the Yamal LNG facility which is already shipping natural gas to clients via tankers plying Arctic waters.

Chief executive Patrick Pouyanne said last month that TotalEnergies would not suddenly stop its Russian operations completely, since “we’ve invested nearly $13 billion in these sites… that are going to operate whether I leave or not.”

“Pulling out would mean I’d be giving this $13 billion to the Russians… Should I abandon these assets to enrich the Russians that we have sanctioned?”

But Pouyanne insisted that within the wake of Russia’s assault on Ukraine, “There’s no destiny increase for TotalEnergies in Russia, I’ve crossed out all the future we had been constructing in Russia.”

He additionally mentioned that Russia accounted for 5 percentage of the firm’s cashflow and 10 percent of its income.