PARIS - French oil major TotalEnergies said on Tuesday it would take a $2.1 billion hit in the fourth quarter from EU and British windfall taxes.
The EU last year acted to allow governments to tax fossil fuel companies on the huge profits generated as a result of the surge in oil and gas prices following Russia's invasion of Ukraine.
That will cost TotalEnergies $1.1 billion for 2022 to be booked as a special item in the fourth quarter, the company said. A similar measure in Britain, where the government announced a 25% windfall tax on oil and gas, will cost it an additional $1 billion.
In a trading update ahead of full-year results to be published next month, the group said cash flow from its LNG business and gas trading activities in the final three months of the year was expected to be higher than in the previous quarter, despite lower gas prices.
It said the impairment related to the decision to no longer account for the 19.4% stake the group holds in Russia's Novatek from the end of 2022 was estimated at about $4 billion - slightly higher than a $3.7 billion forecast it gave last month.
With the latest hit, TotalEnergies will have booked $14.7 billion in impairments on its Russian holdings last year, still less than the $25.5 billion pre-tax charge rival BP took in March 2022.
The French group added that share buybacks had totalled $2 billion in the fourth quarter of 2022 and should continue at the same pace over the first quarter of 2023.
(Reporting by Silvia Aloisi; Editing by Sudip Kar-Gupta and Richard Lough)