TotalEnergies SE (TTE) CEO Patrick Pouyanné on Q1 2022 Results - Earnings Call Transcript

TotalEnergies SE (NYSE:TTE) Q1 2022 Earnings Conference Call April 28, 2022 6:00 AM ET

Company Participants

Patrick Pouyanné - Chairman, Chief Executive Officer & President

Jean-Pierre Sbraire - Chief Financial Officer

Conference Call Participants

Irene Himona - Societe Generale

Christyan Malek - JPMorgan

Oswald Clint - Bernstein

Michele Della Vigna - Goldman Sachs

Lydia Rainforth - Barclays

Christopher Kuplent - Bank of America

Bertrand Hodee - Kepler Cheuvreux

Alastair Syme - Citigroup

Peter Low - Redburn

Biraj Borkhataria - RBC

Henri Patricot - UBS

Martin Rats - Morgan Stanley

Jason Gabelman - Cowen

Patrick Pouyanné

Good morning, and hello to everyone. Welcome to this conference call for the first quarter of 2022. Given the geopolitical turmoil and the market volatility, I am joining the call to talk about we are navigating this environment and to answer your question from the perspective of management and the Board. I am today with Jean-Pierre, and he will present you the results after my initial remarks and then the Q&A. So to that point, it was a month ago on February 24 that Russia invaded Ukraine, triggering violence and destructions that have killed thousands and displaced millions.

So TotalEnergies condemns this military aggression. And in response, we have outlined on March 22 our principles of conduct to manage our Russian-related activities, including our full support to current and future sanctions, whatever the consequences on our assets will be.

Going beyond the sanctions, we have also announced our decision to stop the flow of capital to new projects in Russia, initiated a gradual suspension of our activities there while ensuring the safety of our staff. In doing so, we are exercising our duty of vigilance in line with our corporate responsibility. We have begun to end our activities related to Russian oil and petroleum products. We stopped spot trading transactions linked to Russian oil or natural gas.

On March 22, we announced that given the uncertainty created by the technological and financial sanctions on the ability to carry out the Arctic LNG 2 project, currently under construction, and there are probable tightening with the worsening conflict, we had decided to no longer book reserve for this project. Since then, on April 8th, new sanctions have effectively been adopted by European authorities, notably prohibiting exports from European Union countries of goods and technologies for the use in the LNG benefiting a Russian company. This new provision constitute additional risk on the execution of the Arctic LNG 2 project. And as a result, we decided to record in the accounts of TotalEnergies SE as of March 31, 2022, an impairment of $4.1 billion, concerning notably Arctic LNG 2. Our activity related to Russia is essentially indeed, in fact, centered around LNG supply from Yamal LNG, which the EU has deemed necessary until now. And so until there is a change through possible sanction, we'll continue to honor our contractual obligations and protect the company from potential significant viability.