Germany has taken the German subsidiary of the Russian oil giant Rosneft under state control, putting three refineries into a trusteeship ahead of a partial European embargo on Russian oil at the end of the year.
The federal network regulator will become the temporary trust manager of Rosneft Germany and its share of refineries in Schwedt, near Berlin, in Karlsruhe and in Vohburg, Bavaria, Germany’s ministry for economic affairs announced on Friday.
Rosneft Germany is the country’s largest single oil processing company, accounting for about 12% of its capacity for processing crude oil.
Germany’s Federal Network Agency is already the trustee of Gazprom Germania, having been appointed to take control of the Russian state-owned company’s subsidiary in April.
At a press conference in Berlin on Friday afternoon, the German chancellor, Olaf Scholz, said the move had been made to ensure that Germany would be supplied with oil “in the medium and long term”.
He added: “Russia is no longer a reliable supplier of energy, that is obvious from recent weeks”.
Scholz said he had not informed the Russian president, Vladimir Putin, of the decision to put Rosneft Germany into German state hands during their phone call at the start of the week.
Much of German anguish about an oil embargo has concentrated around the PCK Schwedt refinery on the border with Poland. The site, which employs about 1,100 people in one of Germany’s economically weaker regions, is key for the supply of petrol to the entire Berlin-Brandenburg region, including the capital’s airport.
Speaking at the press conference with Scholz, the state premier of Brandenburg, Dietmar Woidke, said there has for months been a great fear of looming redundancies at Schwedt, a region particularly sensitive to transformation since going through the economic upheavals that followed the fall of the Berlin Wall.
Scholz said the trusteeship would ensure that the refinery can continue to run, and “redundancies should thus be avoided”.
Schwedt had been reliant on supplies via the Soviet-era Druzhba (“friendship”) pipeline, which takes Russian oil across Ukraine to Europe.
After months of wrangling, the EU in May agreed to a partial ban on Russian oil, with the aim of cutting off funding to the Kremlin’s war machine. According to the European Council president, Charles Michel, three-quarters of Russian oil imports will be affected immediately, rising to 90% by the end of the year.
In a concession to Hungary, Druzhba was exempted from the EU’s embargo, but Germany and Poland have stated their intention to stop using the pipeline for oil deliveries from the end of the year.
According to Germany’s economic ministry, the country has since the start of the Ukraine war managed to reduce the share of Russian oil in its overall consumption from 35% to 12%.
How Germany will compensate for Russian oil in the future still remains unclear, however. One solution under discussion is to supply the oil that is refined at Schwedt via Baltic seaports in Rostock or Gdansk in Poland.
Gdansk can feed into Druzhba via a pipeline link and could in the future ship in oil deliveries from the US or countries like Kazakhstan. While Schwedt was still owned by a Russian oil company, however, Poland was unlikely to agree to a formal arrangement.
One obstacle is that PCK Schwedt is built especially to refine Russian oil, and any substitute would either need to have a similar quality or go hand-in-hand with modifications at the plant.
Scholz on Friday announced €1bn (£874m) of investment in the region, of which £825m would go to the Schwedt refinery and some be spent on upgrading the pipeline from Rostock.
