Berlin puts the activities of the Russian group Rosneft in Germany under supervision

(Frankfurt) The energy showdown between Berlin and Moscow took a new step on Friday when Germany placed Russian giant Rosneft’s activities in the country under scrutiny in a bid to “secure” its oil supplies.

Posted at 9:14 am

Jean Philippe LACOUR
Media Agency France

Rosneft’s subsidiaries in Germany, which account for 12% of the country’s oil refining capacity, will be placed under “trust administration” by the national agency that manages the energy grids, the economy ministry said.

This trusteeship is about “reacting to the risks that are affecting the security of supply” of energy in the country, the ministry specified.

The subsidiaries Rosneft Germany (RDG) and the company RN Refining & Marketing (RNRM) hold shares in three major refineries in the country.

The federal government will thus take control of the PCK refinery in Schwedt in the east of the country, in which Rosneft has a majority stake (54.2%) and which supplies the capital Berlin, its airport and the entire region with fuel.

At the other two sites affected, MiRo in Karlsruhe and Bayernoil in Vohburg, Rosneft holds a minority stake alongside other large western oil companies.

The conservatorship comes into force on Friday and is initially limited to six months.

In doing so, “we are making ourselves more independent of Russia and the decisions made there,” said Federal Chancellor Olaf Scholz at a press conference.

Back in gas

Berlin had already taken over the former German Gazprom subsidiary Gazprom Germania at the beginning of April in order to secure its gas supply this time.

Since then, the federal government has had to release aid of 9 to 10 billion euros to save the company, which was threatened with bankruptcy.

Now the future oil supply must be secured after the EU decided on an embargo on Russian oil after Moscow’s war in Ukraine.

So far, the Schwedt refinery has only processed Russian oil, which is transported via the Druzhba (“friendship” in Russian) pipeline. But since Berlin has promised to stop Russian imports by the end of the year, the government has to force the conversion of the location.

With the takeover, Berlin also wants to prevent the refinery from being expropriated or even liquidated by its owner due to a lack of sufficient liquidity or Russian oil.

In Schwedt, “we could have got into a situation in which the security of supply is no longer guaranteed,” Economics Minister Robert Habeck stated in front of the press.

What future for Schwedt?

For months, Berlin has been looking for alternatives to Russian oil in order to maintain operations in the Schwedt industrial site, around a hundred kilometers from Berlin.

On site, the 1,200 employees of the former GDR factory, which has been supplied with Russian oil since the 1960s, look to the future.

“We have to make sure that the workers don’t have to worry about their future,” stressed Scholz when he presented a plan for the transformation of the refinery on Friday.

The federal and state governments want to spend “more than a billion euros” on this in the next few years.

The refinery is to be supplied with oil via the ports of Rostock in the north of the country and Gdansk in Poland.

To this end, the line connected to Rostock is being “modernized” so that larger flows can be routed to Schwedt, while talks are being held with Warsaw.

However, the chancellor and her minister failed to ensure on Friday that the volumes of Russian oil processed at the site could be fully offset by alternative supplies.

“We have a good chance of having enough oil to run the refinery,” Habeck said.

Europe’s largest economy has already greatly reduced its dependence on Russian oil imports, which accounted for 35% of its supplies before the Russian war in Ukraine.

At the same time, Russia has temporarily halted gas supplies to the country, which the latest government forecasts suggest it will not be able to fully replace before 2024.

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