TotalEnergies has paused a planned $4bn investment in a green hydrogen project with embattled Adani Group, saying it was waiting for more clarity on the Indian conglomerate’s situation before proceeding.
The French oil and gas group is one of the biggest foreign investors in businesses connected to the Indian group, which is under fire following a US short seller’s report highlighting the group’s debt pile and alleging accounting fraud and stock manipulation, which Adani denies.
Total said it would not immediately proceed with its latest venture, which involved taking a 25 per cent stake in Adani New Industries Ltd as part of an ambitious hydrogen co-development with Adani Enterprises.
“This project was announced but nothing has been signed . . . and for now it won’t be signed,” chief executive Patrick Pouyanné told reporters on Wednesday. “It makes no sense to add more [projects] until there is clarity.”
Total has just over $3bn of investments with Adani, including in gas distribution and solar projects, which it has played down as a small 2.4 per cent slice of its total capital commitments.
Those stakes were still worth far more than Total had paid for them, Pouyanné said, despite an Adani share rout of about $100bn since the short seller Hindenburg Research made its allegations. Pouyanné added that those businesses were backed by functioning assets and were healthy, and Total has defended its own due diligence on the deals.
The uncertainty surrounding Total’s latest investment is an additional blow for Adani, which has set up Adani New Industries Ltd to create “the world’s largest green hydrogen ecosystem”.
Adani said last year that it would invest $50bn in green hydrogen over the next decade, as part of a wider push by the industrial group to diversify into clean energy sources. The company has been the subject of fierce global criticism for its continued investment in coal mining, including its controversial Carmichael mine in Australia.
Total’s comments came as the group joined oil and gas rivals in reporting record profits for 2022, lifted by soaring commodities prices.
The French group was hit by almost $15bn in impairments last year as it began to retreat from Russia. Windfall taxes in Britain and Europe also dragged on earnings in the fourth quarter.
But net profits still rose in 2022 to a record $20.5bn and surpassed analysts’ expectations on an adjusted basis, reaching $36bn as the group joined rivals from Shell to BP in reporting bumper results.
The company on Wednesday said it would increase its dividend by 6.4 per cent to €2.81 per share, on top of a €1 per share special payout it had already announced, and said it would buy back another $2bn worth of shares in the first quarter.
Total also confirmed a plan to spin off its exploration and production business in Canada in a Toronto listing, adding that it would keep 30 per cent of the business and distribute the rest of the shares to its own shareholders.
