TTE TotalEnergies SE

By Anatoly Kurmanaev 

ST. PETERSBURG, Russia -- French President Emmanuel Macron drew a spotlight to growing discord between U.S. and European foreign policy Friday, touting a new multibillion investment in Russia by his country's top oil company and joining President Vladimir Putin in defense of the Iran nuclear deal.

Appearing alongside Mr. Putin at Russia's main economic forum Friday, Mr. Macron said French major Total SA's estimated $2.6 billion investment in a giant Arctic natural-gas facility would help French energy security and pave the way for closer business ties between the countries.

The agreement, which was signed by Total in Mr. Macron and Mr. Putin's presence Thursday evening, comes amid the White House's attempts to isolate the Russian economy in response to Mr. Putin's alleged meddling in U.S. elections and military interventions in Ukraine. Total's partner is an energy firm founded and partially owned by Mr. Putin's longtime acquaintance Gennady Timchenko, who was sanctioned by the U.S. in 2014 over Russia's annexation of Crimea.

President Donald Trump's decision to withdraw from a nuclear deal with Iran and bring back sanctions has caused bafflement and anger from London to Berlin and pushed European leaders to look to Russia in an attempt to keep Tehran's nuclear program dormant. German Chancellor Angela Merkel met with Mr. Putin on a visit to Russia last week.

"I couldn't convince Trump on Iran -- I tried," said Mr. Macron. "I think he scrapped the 2015 deal just because it was signed by his predecessor, hence bad by the definition."

But the outreach to Russia is tempered by tensions over Moscow's interventions in Ukraine, alleged meddling in European politics, and the poisoning of a former Russian spy in the U.K.

At the forum, Mr. Macron defended the EU's right to make its own foreign policy and business decisions. "We have to shield some [business] sectors from politicization," said Mr. Macron.

Mr. Timchenko applauded Mr. Macron's speech from the first row.

Total Chief Executive Patrick Pouyanne said the company's new investment in the Russian natural gas project is a salve for losing out to U.S. sanctions on Iran.

Mr. Pouyanne said U.S. sanctions made it impossible for Total to continue working in Iran, making his company seek new resources elsewhere. "I cannot run a company like Total under threats [that]...I'll have no access to the U.S. banking [system] no access to U.S. shareholders, no access for myself as the CEO to the U.S. territories," he said.

Under the Russian gas deal, Total will take 10% in the Arctic LNG 2 project operated by PAO Novatek, Russia's second-largest natural gas company and which is co-owned by Mr. Timchenko.

Total and Novatek, along with Chinese partners, last year launched the $27 Yamal LNG plant, which is located across the river from Arctic LNG 2 and takes liquefied natural gas to buyers mainly in Asia.

Efforts to source funds for that project were complicated by a U.S. decision that barred the companies from raising financing for it in dollars.

The new project, which will cost an estimated $25.5 billion, aims to ship nearly 20 million metric tons of liquefied gas a year.

Mr. Pouyanne said Total has already committed to invest $9 billion in Russia in other projects. Mr. Macron said he hopes France would soon overtake Germany as Russia biggest European investor.

Mr. Macron did mention notes of discord with Russia over Ukraine, and visited Thursday with representatives of a human-rights organization that is often harassed by authorities.

Mr. Macron's appearance at the forum came a day after an international team of investigators based in the Netherlands said that analysis of video and photos demonstrated that the missile that shot down a passenger jet over eastern Ukraine had come from a Russian military unit.

Russia has denied involvement in the shootdown, which killed 298 passengers and crew.

--Chip Cummins contributed to this article.

Write to Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com

(END) Dow Jones Newswires

May 25, 2018 11:15 ET (15:15 GMT)

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