One of the world’s largest oil and gas companies, French giant Total, managed to “build bridges” with Russia despite sanctions, its chairman and CEO Patrick Pouyanne said in an interview with Le Monde.
“Sanctions are a corrupted system that damages people who have no other choice but to support their country,” he said. “Sanctions eventually produce results which are directly opposite to those intended by their authors.”
Pouyanne said his company would continue to pursue its business interest in Russia.
“The example of Yamal LNG has shown that together with Russia we can implement major projects worth $27 billion, without using the U.S. dollar and fully in line with the sanctions regime,” the Total chief continued.
“We have managed to build bridges where walls used to be.”
According to the French business newspaper Les Echos, Yamal LNG is among the world’s biggest liquefied natural gas production projects. Due to U.S. sanctions against Russia – Total and its partners had to undertake the project without dollars, so they worked with Russian, European and Chinese banks instead.
The shareholders of Yamal LNG are Russia’s Novatek (50.1%), Total (20%), CNPC (20%) and the Chinese Silk Road Fund (9.9%). Yamal will become Novatek’s first LNG plant. The project is being implemented on the Yamal peninsula in Russia Arctic region.
It will be implemented in three stages, each with the capacity of 5.5 million tons a year. Now the first stage has been completed. The second and the third one will be put into operation in 2018-2019.
In the interview, Pouyanne said the net profit of Total increased by nearly 30% in 2017 thanks to controlled spending and an increase in crude oil production and prices. The company’s official results are to be announced next week. In 2016, Total had net income of $6.2 billion and adjusted net income of $8.3 billion.
The CEO also warned the recent rebound in oil prices after several years of decline will not necessarily continue in the coming years. He said the company is “working on scenarios of decline to 50 dollars a barrel”. The sharp contraction of investment in the sector during the downturn will, however, limit the amount of oil available, Pouyanne said.
“After 2020, we run the risk of running out of oil,” he warned.