TotalEnergies confirms exit from Russia’s Arctic LNG 2

TotalEnergies ↘ 0.23% announced Thursday that it will divest its 10% stake in Russia's Arctic LNG 2 project, formally ending its involvement in a venture that has been hobbled by Western sanctions since late 2023.

CEO Patrick Pouyanné made the announcement during the company's second-quarter earnings call, telling analysts that the transfer to Nordline, a subsidiary of majority owner Novatek, had been approved by Russian authorities and would be completed in the short term.MarketScreener Deutschland+1

A Long-Anticipated Exit

The exit was set in motion on June 3, when Russian President Vladimir Putin signed a decree authorizing TotalEnergies to sell its stake to Nordline LLC, which the Interfax news agency identified as a newly created Novatek subsidiary. At the time, TotalEnergies declined to comment on the decree. Thursday's confirmation by Pouyanné marks the first time the company has publicly acknowledged the transaction.Reuters+2

The departure brings Novatek's share in Arctic LNG 2 to 70%, with the remaining 30% held by Japanese and Chinese energy firms. No financial terms have been disclosed.WorldOil+1

Sanctions and Writedowns

The U.S. Treasury designated Arctic LNG 2 as a Specially Designated National in November 2023, prompting TotalEnergies to assess the impact on its contractual obligations. The company had already recorded a $4.1 billion impairment on the project in the first quarter of 2022, following earlier rounds of sanctions tied to Russia's invasion of Ukraine. TotalEnergies subsequently declared force majeure on its commitments to the project.reuters.com+2

The exit also comes as the European Union moves to sever remaining energy ties with Russia. In January 2026, EU member states formally adopted a regulation phasing out all Russian LNG imports by the end of 2027. A June letter from the European Commission further clarified that EU-based companies would be barred from marketing Russian LNG even to non-EU buyers.S&P Global Energy+2

Strong Quarter Despite Geopolitical Headwinds

The Arctic LNG 2 divestment was disclosed alongside TotalEnergies' second-quarter results, which showed adjusted net income of $6 billion and cash flow of $9.8 billion, up roughly 15% from the prior quarter. The company reported production of 2.395 million barrels of oil equivalent per day, benefiting from ramp-ups at projects in Brazil, the United States, and Libya.totalenergies+2