In a strategic move in the European energy sector, TotalEnergies has taken full control of the operations of the Zeeland refinery, located in the Netherlands. However, the French company has not yet acquired the 45% stake still held by Russian oil company Lukoil.
The transaction is part of an existing shareholder agreement, explained Patrick Pouyanné, CEO of TotalEnergies, who clarified that the Russian stake will remain unchanged until Lukoil manages to sell it.
Lukoil forced to exit due to sanctions
The pressure on Lukoil comes in the wake of sanctions imposed by the U.S. Treasury Department on the U.S. Treasury Department in October 2023. These measures seek to weaken the Russian economic apparatus as part of the international response to the war in Ukraine. As a direct consequence, Lukoil has initiated the sale of its international assets, the total value of which was initially estimated at $22 billion.
The 45% stake in the Zeeland refinery was acquired by Lukoil in 2009 for around $725 million, during a state visit by then Russian President Dmitry Medvedev to the Netherlands. At the time, the deal was seen as a symbol of the strengthening of Russia’s presence in northwest Europe.
A step without government intervention
Despite the geopolitical context, the government of the Netherlands has not intervened in the transaction. A spokesperson for the Ministry of Climate and Green Growth stated that “this is an internal matter for Total, like any other corporate decision, which did not require any government approval or action.” The reason is that the refinery itself has not been directly targeted for sanctions.
Boost for TotalEnergies
This step strengthens the position of TotalEnergies in the European refining market. The company reported that its refining profits increased by more than 200% in the last quarter, underscoring the positive financial impact that the direct management of the plant in Zealand could have.
While the fate of the Russian stake is being defined, TotalEnergies consolidates its control over the operation of a key infrastructure for fuel supply in Western Europe. The future of the refinery will depend on who will be the buyer of the 45% still owned by Lukoil, which adds an element of uncertainty to the outlook.
Source: Reuters
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