Total Energies to cough up £1.7bn to pay off hiked windfall taxes

French oil major TotalEnergies has confirmed it will take a £1.7bn ($2.1bn) 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 $1.1bn 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 per cent windfall tax on oil and gas, will cost it an additional $1bn.

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 per cent stake the group holds in Russia’s Novatek from the end of 2022 was estimated at about $4bn – slightly higher than a $3.7bn forecast it gave last month.

With the latest hit, TotalEnergies will have booked $14.7bn in impairments on its Russian holdings last year, still less than the $25.5bn pre-tax charge rival BP took in March 2022.

The French group added that share buybacks had totalled $2bn in the fourth quarter of 2022 and should continue at the same pace over the first quarter of 2023.

Reuters.