REG-TotalEnergies SE Russia: TotalEnergies Shares Its Principles of Conduct

TotalEnergies SEAnnouncement

22/03/2022 17:45

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Russia: TotalEnergies Shares Its Principles of Conduct

TotalEnergies to Stop Purchasing Oil and Petroleum Products from Russia

 

After the serious and unfounded accusations of "complicity in war crimes"
leveled against TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE), the Company
shares with its stakeholders its principles of conduct regarding its Russian
related businesses in order to allow them understand how our Company is acting
in a responsible manner. Considering the worsening conflict, TotalEnergies is
also taking new steps.

TotalEnergies reaffirms its firmest condemnation of Russia's military
aggression against Ukraine, which has tragic consequences for the Ukrainian
population and threatens peace in Europe.

To act responsibly, as a European company and in accordance with its values,
TotalEnergies has defined clear principles of conduct for managing its Russian
related business:


 * Ensure strict compliance with current and future European sanctions, no matter
what the consequences on the management of its assets in Russia, and gradually
suspend its activities in Russia, while assuring its workforce's safety.

TotalEnergies recalls that, contrary to remarks made by several commentators,
it does not operate any oil and gas fields or any liquefied natural gas (LNG)
plants in Russia.

TotalEnergies is a minority shareholder in a number of non-state-owned Russian
companies: Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%) and
TerNefteGaz (49%). These companies are managed by their own staff with a
limited number of secondees from TotalEnergies. TotalEnergies is also a 20%
partner in the Kharyaga joint venture operated by Zarubezhneft. The Company
did indeed contribute to the construction phase of these companies' projects
but has no activity or operational responsibility on those sites.

TotalEnergies had only 11 secondees in these companies as of February 24,
2022, and only 3 seconded expatriates are in Russia as of today. TotalEnergies
has thus initiated the gradual suspension of its activities in Russia, while
assuring its teams’ safety. Similarly, TotalEnergies has decided to put on
hold its business developments for batteries and lubricants in Russia.


 * Provide no further capital for the development of projects in Russia.

Concerning the Arctic LNG 2 project in particular, given the uncertainty
created by technological and financial sanctions on the ability to carry out
the Arctic LNG 2 project currently under construction and their probable
tightening with the worsening conflict, TotalEnergies SE has decided to no
longer record proved reserves for Arctic LNG 2 in its accounts and will not
provide any more capital for this project.


 * Do not reverse the purpose of sanctions against Russia: do not unwarrantedly
transfer value to Russian interests by withdrawing from assets.

The current environment of European sanctions and Russian laws controlling
foreign investments in Russia would prevent TotalEnergies to find a
non-Russian buyer for its minority interests in Russia. Abandoning these
interests without consideration would enrich Russian investors, in
contradiction with the sanctions' purpose. In addition, abandoning these
minority interests held by TotalEnergies would have no impact on the
companies' operations and revenues, since these companies have their own
employees and are managed autonomously.


 * Help ensure the security of the European continent's energy supply within the
framework defined by European authorities.

TotalEnergies is a European energy company that must contribute to the supply
security of the European continent, which does not have the same domestic
resources as other western countries such as the United Kingdom or the United
States.

In accordance with the European Union's decisions to maintain at this stage
Russian gas supplies, TotalEnergies continues to supply Europe with liquefied
natural gas from the Yamal LNG plant within the framework of long-term
contracts that it must honor as long as Europe's governments consider that
Russian gas is necessary. Contrary to oil, it is apparent that Europe's gas
logistics capacities make it difficult to refrain from importing Russian gas
in the next two to three years without impacting the continent's energy
supply.

However, given the worsening situation in Ukraine and the existence of
alternative sources for supplying Europe, TotalEnergies has unilaterally
decided to no longer enter into or renew contracts to purchase Russian oil and
petroleum products, in order to halt all its purchases of Russian oil and
petroleum products as soon as possible and by the end of 2022 at the latest.

TotalEnergies already announced that it halted all spot market trading since
February 25, 2022, on Russian oil and petroleum products. This is also the
case for spot trading transactions concerning Russian natural gas or liquefied
natural gas.

TotalEnergies has term contracts to purchase Russian oil and petroleum
products that end, at the very latest, on December 31, 2022. These term
contracts primarily cover supplies for the Leuna refinery in eastern Germany,
which is served by the Druzhba pipeline from Russia. They also concern
Europe's gasoil supply, which is short of this product (around 12% of Russian
gasoil imports in Europe in 2021).

In close cooperation with the German government, TotalEnergies will terminate
its Russian oil supply contracts for the Leuna refinery as soon as possible
and by the end of 2022 at the latest, and will put in place alternative
solutions by importing oil via Poland. Already, a first contract will not be
renewed at the end of March 2022.

Concerning the gasoil shortfall in Europe, absent any instructions to the
contrary from European governments, TotalEnergies will also terminate its
Russian gasoil purchase contracts as soon as possible and by the end of 2022
at the latest. TotalEnergies will import petroleum products from other
continents, notably its share of gasoil produced by the Satorp refinery in
Saudi Arabia.

***

About TotalEnergies

TotalEnergies is a global multi-energy company that produces and markets
energies: oil and biofuels, natural gas and green gases, renewables and
electricity. Our 105,000 employees are committed to energy that is ever more
affordable, cleaner, more reliable and accessible to as many people as
possible. Active in more than 130 countries, TotalEnergies puts sustainable
development in all its dimensions at the heart of its projects and operations
to contribute to the well-being of people.

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Cautionary Note

The terms “TotalEnergies”, “TotalEnergies company” or “Company” in
this document are used to designate TotalEnergies SE and the consolidated
entities that are directly or indirectly controlled by TotalEnergies SE.
Likewise, the words “we”, “us” and “our” may also be used to refer
to these entities or to their employees. The entities in which TotalEnergies
SE directly or indirectly owns a shareholding are separate legal entities.
This document may contain forward-looking information and statements that are
based on a number of economic data and assumptions made in a given economic,
competitive and regulatory environment. They may prove to be inaccurate in the
future and are subject to a number of risk factors. Neither TotalEnergies SE
nor any of its subsidiaries assumes any obligation to update publicly any
forward-looking information or statement, objectives or trends contained in
this document whether as a result of new information, future events or
otherwise. Information concerning risk factors, that may affect
TotalEnergies’ financial results or activities is provided in the most
recent Universal Registration Document, the French-language version of which
is filed by TotalEnergies SE with the French securities regulator Autorité
des Marchés Financiers (AMF), and in the Form 20-F filed with the United
States Securities and Exchange Commission (SEC).

TotalEnergies

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com
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Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com
(mailto:ir@totalenergies.com)



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