“The first thing which is having an impact on the business of everybody in Russia, not only Total, but all our competitors including Americans, is definitively the financing of projects,” de Margerie said today in a Bloomberg Television interview in Caen, Western France.
“A lot of financial institutions have already been taking a cautious position: even if it’s not forbidden, let’s wait and see before we continue to lend money,” he said.
Russia’s seizure of Crimea and alleged interference in eastern Ukraine led the U.S. and European Union to impose asset freezes and travel bans on 20 companies and 98 people, including on Gennady Timchenko, a shareholder of OAO Novatek (NVTK), in which Total holds a stake.
U.K. lenders HSBC Holdings Plc and Lloyds Banking Group Plc have pulled out of a $2 billion loan for BP Plc and Moscow-based oil producer OAO Rosneft, according to a person with knowledge of the matter.
“Short term,” it has “no impact” on Total, de Margerie said. “If it’s lasting long, we will have to see what are other opportunities to develop our projects because we need to raise financing.”
Group of Seven leaders yesterday spared Russia further sanctions in favor of diplomatic efforts to resolve the Ukraine crisis, pressuring President Vladimir Putin’s government to cut off support to pro-Moscow separatists.
The world’s leading developed economies urged Russia to complete the pullback of its troops from Ukraine’s eastern border, warning that they “stand ready to intensify targeted sanctions and to implement significant additional restrictive measures” in the absence of a peaceful settlement, according to a statement.
“We don’t consider that embargoes are the right way to make things change,” the Total CEO said. “At the same time, when embargoes are implemented, we respect them, and probably more than a lot of others.”
Russia was Total’s biggest source of production after Nigeria, the United Arab Emirates and Norway last year, providing 207,000 barrels of oil equivalent a day.
Total and Moscow-based OAO Lukoil (LKOD) last month agreed to set up a venture to seek so-called tight oil in Siberia. Investment in the venture will be $120 million to $150 million in the first two years, according to Lukoil CEO Vagit Alekperov.
In partnership with Novatek, Total plans to build n gas-export terminal in Russia’s Arctic. Chinese lenders may help fund the $27 billion project in place of European banks, de Margerie said in Paris last month.