France's TotalEnergies says unable to end Russian gas purchases
PARIS — TotalEnergies' Chief Executive Patrick Pouyanne said on Wednesday that his company could not stop buying Russian natural gas in retaliation for Moscow's invasion of Ukraine, saying it would force a partial economic shutdown in Europe.
The French energy giant had announced Tuesday that it would stop buying Russia's oil and petroleum products by the end of this year, the latest of several multinationals to halt or curtail their operations in the country.
But the CEO said ending its natural gas purchases from Russia would effectively hand over billions of euros to Russian investors.
Unlike oil, which can more easily be shipped for sale anywhere in the world, natural gas is often supplied via pipelines directly to individual countries and clients.
"I know how to replace this oil and diesel fuel," Pouyanne told RTL radio, but "with gas, I don't know how to do it".
"I don't know how to replace it, there isn't any other available, and I have 25-year contracts that I can't get out of," he said.
Unless European governments impose sanctions on Russian gas, which would allow companies to declare force majeure to break contracts, pulling out of existing deals would require TotalEnergies to pay billions in penalties to its Russian partners.
Pouyanne also warned that European economies would pay a heavy price.
"Without Russian gas, you stop part of the European economy... If we stop Russian gas we know that in winter 2023 we have a problem, in January we'll have to ration gas use, not for households but probably for industry," he said.
Pouyanne also said Total 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 in the wake of Russia's assault on Ukraine, "There's no future growth for TotalEnergies in Russia, I've crossed out all the future we were building in Russia", noting that Russia accounted for five per cent of its cashflow and 10 per cent of its earnings.