PARIS, July 30 (Reuters) – French oil major Total stopped buying shares in Russia's Novatek when a Malaysian airliner was shot down over Ukraine, but it is still too early to gauge the impact of western sanctions against Russia, Total said.
Total is one of the top foreign investors in Russia but now faces a cloud over its future there since the downing of flight MH17 on July 17 over Ukrainian territory held by pro-Russian rebels worsened the oil-rich country's relations with the West and raised the threat of deeper sanctions.
The oil company had forecast in April that Russia would become its biggest source of oil and gas by 2020 thanks to its partnership with Novatek and their Yamal LNG project in Siberia.
"We stopped buying shares in Novatek the day of the plane accident, considering all the uncertainties that this event could lead to," Chief Financial Officer Patrick de La Chevardiere told reporters in a conference call.
"We have not stopped operations on the Yamal project at this stage. We agreed with our partners to take stock of the situation at the end of August," he said during a presentation of the company's second-quarter results.
Shares in Total fell as much as 3.1 percent, the biggest decliner in an index of European oil and gas companies. Total's net adjusted profit fell to $3.15 billion, less than a $3.27 billion consensus analyst forecast cited by Bernstein.
"Results are one reason, it's true, but let's not forget Russia, to which the group is very exposed," a Paris-based fund manager said of the share price drop that wiped 3.7 billion euros off the market capitalisation of France's biggest company.
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