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(Fixes garbles i top two paragraphs)
* Q2 net adj profit down 12 pct to $3.15 bln
* MH17 flight downing pushed Total to stop buying shares -CFO
* Yamal development operations continuing, review in August- CFO
* Says impact on Yamal LNG of sanctions on Russia stilluncertain
* Says production bottomed out in the second quarter
* Q2 net adj profit down 12 pct to $3.15 bln
By Michel Rose
PARIS, July 30 (Reuters) - Total stopped buyingshares in Russia's Novatek the day of the downing of aMalaysia Airlines flight over Ukraine, but it is still too earlyto gauge the impact of western sanctions against Russia, theFrench oil major revealed with its second quarter results onWednesday.
Total is one of the top foreign investors in Russia but itfaces a cloud over its future there since the downing of theaircraft over Ukrainian territory held by pro-Russian rebelsworsened the oil-rich country's relations with the west andraised the threat of deeper sanctions.
The oil firm forecast in April that Russia would become itsbiggest source of oil and gas output by 2020 thanks to itspartnership with Novatek and their Yamal LNG project in Siberia.
"We stopped buying shares in Novatek the day of the planeaccident, considering all the uncertainties that this eventcould lead to," Chief Financial Officer Patrick de LaChevardiere told reporters in a conference call.
Flight MH17 was downed on July 17 by what Western countriessay was a Russian-supplied missile, killing all 298 people onboard.
"We have not stopped operations on the Yamal project at thisstage. We agreed with our partners to take stock of thesituation at the end of August," he said during a presentationof the group's second-quarter results.
At end-June, Total owned 18 percent of Novatek, which hasseen one of its shareholders hit by U.S. sanctions. Total hadbought a 12 percent stake in Russia's second-largest natural gasproducer for $4 billion in 2011 with an option to increase itsholding to 19.4 percent within three years.
De La Chevardiere said the group was not doing business withpeople on the U.S. and EU sanction lists, although he said hehad yet to see the EU's latest list of measures against Russianoil companies, banks and defence firms over Moscow's support forrebels in eastern Ukraine, unveiled late on Tuesday.
"We need more time to review the consequences of thesesanctions. If these sanctions forbid us to work there, we willbe forced to stop working, but we can't forget that Russia is abig oil country," De La Chevardiere said.
Russia accounted for about 9 percent of the group's oil andgas output in 2013.
The $27 billion Arctic Yamal peninsula liquefied natural gas(LNG) project, which plans to export 16.5 million tonnes of LNGa year, also caused some headaches at French oil services firmTechnip, which last week cut its margin target for itsonshore/offshore unit for this year and next.
Total's London-based rival BP, which makes about athird of its crude oil output in Russia, also warned thatfurther Western sanctions could harm its business there and itsrelationship with Russian state oil group Rosneft.
PRODUCTION BOTTOMED OUT
In the second quarter of the year, Total said its oil andgas production fell 10 percent compared to the same quarter ayear ago, to 2.054 million barrels of oil equivalent per day(boepd).
The main reasons were heavy maintenance, the deteriorationof the security situation in Libya, and the loss of the ADCOconcession in Abu Dhabi, which the emirate took over in Januaryand is expected to re-award in 2015.
"This year all the maintenance was concentrated on thesecond quarter," the CFO said, citing work in the North Sea,Nigeria and Thailand.
The same reasons impacted the group's net adjusted profit,which fell 12 percent year-on-year to $3.15 billion, also hit byvery weak refining margins, which were less than half the levelsof a year ago in the three months to end-June.
"We went through moments when margins were negative duringthe second quarter, we cut production to the technical minimumat some refineries because the more we produced the more we lostmoney," he said, declining to say which ones.
The CFO said output had hit a bottom, and was now expectedto rise as projects such as Laggan-Tormore in the North Sea andOfon Phase 2 in Nigeria came on stream in the second half of theyear.
De La Chevardiere said he would give an update on thegroup's long-term production targets, 2.6 million boe/d in 2015and 3 million boe/d in 2017, at the annual investor dayconference in London in September.
"But it's clear that delays at Kashagan are not good news,"he added, saying that the operator did not expect any restart ofthe giant Kazakh field before 2016.
De La Chevardiere also said China's Sinopec had notifiedTotal that it would not buy its Usan field in Nigeria after all,a $2.5 billion deal for a stake in the OML 138 block that theFrench group had announced in November 2012.
"I ignore their reasons. We have launched two days ago theprocess to find a bank to relaunch the sale process and find anew buyer," he said.
Total proposed a dividend of 0.61 euros per share for thesecond quarter. Revenue was up 2 percent to $62.56 billion. (Reporting by Michel Rose; Editing by Andrew Callus)
