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Germany has taken control of an oil refinery owned by Rosneft located in the city of Schwedt. Georgi Kantchev and Bojan Pancevski report for The Wall Street Journal:
Germany took control of the German business of Russian oil giant Rosneft Oil Co. as Berlin races to safeguard its energy supplies before its planned ban on Russian oil imports kicks in later this year.
The German government said it would place Rosneft’s German subsidiaries under trusteeship. The business’s flagship asset is the PCK refinery in Schwedt, eastern Germany, that provides Berlin and the surrounding region with much of its gasoline and aircraft fuel. Rosneft’s Germany assets make up a total of around 12% of the country’s oil-processing capacity, making it one of the largest oil-processing companies in the country.
The step marks an escalation in the economic standoff with Russia as Germany seeks to decouple itself from decades of reliance on Moscow’s prolific energy exports. It is the second major Russian energy asset that the German government is taking over in the wake of the Ukraine invasion. Berlin put Gazprom PJSC’s German natural-gas business, formerly known as Gazprom Germania GmbH, under trusteeship in April.
The move raises questions as to whether Schwedt will continue to receive Russian oil. Without supplies, the refinery would only have reserves for about three weeks, a senior PCK manager said. After that, the German capital’s fuel supplies could run short.
Existing pipelines can supply Schwedt with non-Russian oil, but not enough to allow the refinery to operate at capacity, the manager said. Expanding the pipelines’ capacity would cost hundreds of millions of euros and take up to three years, the PCK manager said.
A senior German official denied this was the case and said that the refinery would be supplied via pipelines leading to the port cities of Rostock in northeastern Germany and Gdansk in Poland.
Berlin was initially reluctant to take control of the Rosneft business but moved after Western sanctions against Russia led some banks and IT firms to stop doing business with the company, making it impossible for the refinery to continue operating, officials said, even though Rosneft isn’t sanctioned.
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