French energy firm TotalEnergies has announced that it will no longer be providing capital for new projects in Russia, in light of the nation’s continued attacks on Ukraine. In addition to refusing capital to new projects, the group also said it will provide fuel to Ukrainian authorities and aid Ukrainian refugees in Europe, though it will not be following the footsteps of other energy majors and withdrawing from operations in the nation.
In a statement released today, the group voiced its opposition to Russia’s “military aggression” against its neighbour, which Total says “threatens Europe”.
“TotalEnergies supports the scope and strength of the sanctions put in place by Europe and will implement them regardless of the consequences (currently being assessed) on its activities in Russia,” the group wrote.
The decision follows days of discussions in the French government after BP and Shell both announced their exit from the country. The mass exodus from Russian projects represents billions of dollars and years of deal negotiations lost, and share prices for the exiting groups have been knocked down as a result.
Cutting ties with Russian business is, however, as French Finance Minister Bruno Le Maire said in an interview on CNews Television on Tuesday, “a question of principle”.
TotalEnergies’ operations in Russia bring in around $1.5bn per year – representing 5% of its total cash flow. It holds a large share of the Yamal-Europe pipeline, which runs just over 4,000km and connects Russian natural gas fields to Poland and Germany. Total also has a 10% stake in the future Arctic LNG 2 development, which includes construction of three LNG trains in collaboration with Russian gas company Novatek.
Le Maire has previously spoken on the need to financially isolate Russia, saying at the EU finance ministers’ meeting: “We want to cut off all the links between Russia and the global financial system”.
The comments received backlash from Russian Deputy Chairman of the Security Council Dmitry Medvedev, who wrote on his Twitter: “Today, some French minister has said that they declared an economic war on Russia. Watch your tongue, gentlemen! And don’t forget that in human history, economic wars quite often turned into real ones.”