Total sticks with Russian investment strategy, hoping Ukraine tensions fade

"Russia is a strategic country for Total," and billionaire Gennady Timchenko - one of the most prominent Russian businessmen placed under U.S. sanctions in protest at Russia's actions in Ukraine - has been a major supporter of Total's (TOT) growth ambitions, so the company plans to stick with its investment strategy in Russia, hoping the current tensions are a temporary problem.

Expanding in Russia fits TOT's strategy of finding new reserves to meet growing demand from energy-hungry Asian customers; by 2020, TOT expects Russia will be its most important region in terms of oil and gas output, with production seen at ~400K boe/day, double the current level.

TOT has a track record of riding out political tensions to keep hold of strategic assets - such as its refusal to leave Myanmar after international sanctions targeted the country in 1992 - and seems prepared to do so again.

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Comments (2)
    , contributor
    Comments (82) | Send Message
    TOTAL SA is very well managed ! It rides out specious political obstacles with a long term view. It was far better to stay in communication with Myanmar than to burn the boats on the shore.The company does not kowtow to politicians whose brain horizon is defined by having lived in their home village for the last 50 years.


    As the former US security adviser to President Georg H.W. Bush confirmed in a recent FT article quote:" playing on sanctions with an aggresive Russia is a fool's errand " unquote. The Ukraine is politically and economically in distress. So you need to find an arrangement with Russia like the Viena/Austria situation after WW II. And the " West ", = the "old west", acts without the concert ofChina India Brazil RSA Indonesia etc, has badly managed Russia's concerns about encirclement.
    15 May 2014, 10:06 AM Reply Like
  • Sakelaris
    , contributor
    Comments (2708) | Send Message
    The US sanctions efforts seem ludicrous and the world economy is very interconnected. The sanctions could come back to bite the US in unpredictable ways, probably from an interconnection that we are not even able to predict right now.


    This Total company's bet on Russia is a wise one, as Russia will not allow its kindred people in the Donetsk and Lugansk areas go under the direct rule of those extremists in Kiev. Hopefully America will tire of taking dangerous actions in a part of the world that even Reagan never dared to mess with.
    15 May 2014, 05:47 PM Reply Like
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