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Total step up in investment growth plan to replace Russian gas

TotalEnergies is stepping up its move to cut ties with Russia in order to increase investments that will help it eventually replace its gas supply.

Chief Executive Officer Patrick Pouyane said Wednesday that the company “has no future with Russia,” in an update to its strategy outlining higher payouts to shareholders.

puyanne he said total As part of a growth plan that excludes operating profits in Russia, we plan to increase our net investment in oil, gas and renewable energy over the next three years.

However, the French company has not yet completely severed ties with Russia, receiving dividends from its investments in Russia.

Rivals BP, Shell and Equinor withdrew after the invasion of Ukraine, but Total still has companies in Russia that export liquefied natural gas to Europe.

Total has so far said it will halt all new investments in Russia and phase out its oil purchases this year, but Puyanne said the group could only break deals in Europe. He argued that it would only bring about specific sanctions.

It added that Total still receives dividends from its 19% stake in Russian independent gas producer Novatek and its 20% stake in Siberian LNG project Yamal LNG, though these could end soon. suggested that there is

“It is not easy to receive cash. The financial circuits between Russia and the rest of the world are becoming complicated for Western companies. But we see complexity every month,” Puianne said at the New York Stock Exchange’s Investor Day.

Dividends have been criticized by Ukraine as “blood money”. The Wall Street Journal reported in September that two advisers to Ukrainian President Volodymyr Zelensky had asked Total to either reject the dividend or use the money to rebuild Ukraine.

Russian President Vladimir Putin and Patrick Puyanne (left) in 2019 © Mikhail Svetlov/Getty Images

Europe is still struggling to find an alternative to Russian gas. Pouyanne said in July that the French government told the Financial Times: was encouraging total To maintain the flow of gas from Russia to Europe after the invasion of Ukraine.

Total has accelerated its investment in floating LNG facilities to help Europe diversify its imports and signed major long-term deals with Qatar and others to increase alternative supply in the future.

The company is targeting a 40% increase in LNG production by 2030, so by 2027 more production from LNG facilities in Qatar and the US will be able to replace flows from Russia. says it can.

Large French companies, like their peers, have benefited from higher commodity prices, freeing up cash to pay more shareholders.

All investors will receive a special dividend of €1 per share in 2022 (equivalent to €2.6 billion) in addition to the usual quarterly payments and share buyback plan.

The company’s overall capital expenditures will increase from $14 billion to $18 billion annually through 2025, up from a previous target of $13 billion to $16 billion, Total said, citing investments in renewable energy and We have outlined the key drivers of spending on oil and gas.

The group predicts that new oil projects will be needed by the mid-2030s to meet global demand.

https://www.ft.com/content/98be4e44-59c2-4818-9779-2ad962d9159b Total step up in investment growth plan to replace Russian gas

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