Special Report-TotalEnergies Exits Kharyaga Project in Russia

France’s TotalEnergies has finalized a deal to transfer its remaining stake in Russia’s Kharyaga oil field to the state producer Zarubezhneft. This will become the company’s first major divestment from Russia, which is stricken with Western sanctions. The company said in a statement that it agreed to transfer the remaining 20% stake that the company held in the project.  The transaction will still need approval from the Russian authorities. TotalEnergies did not reveal the terms of the transfer.

The Kharyaga oil project is operated under a product sharing agreement. TotalEnergies had received 100,000 tonnes of oil per month for exports as part of the agreement.

The French company did not act as the seller of that volume in June. Zarubezhneft sold it instead.

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

The company announced in March that it would not renew its supply contract of gasoil and crude oil from Russia for its German refinery. Instead it would source gasoil from Saudi Arabia and crude oil via Poland.

The French energy giant still has minority stakes in a number of Russia fossil fuel projects, including Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%) and TerNefteGaz (49%). It has been criticized for acting slow and not joining rivals Shell and BP in divesting oil and gas assets in Russia.

The company 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.

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