(Bloomberg) Germany seized the local unit of Russian oil major Rosneft PJSC as Berlin moves to take sweeping control of its energy industry, secure supplies and sever decades of deep dependence on Moscow for fuel.
In the latest move, the government said it was taking over Rosneft’s German unit, including stakes in three oil refineries. As Germany prepares to stop buying Russian crude by the end of the year because of sanctions, it needs to find alternative sources and make sure Russian ownership of its key refineries doesn’t become a threat to supplies.
Germany has been particularly hard hit by the economic standoff with the Kremlin because of its reliance on Russian gas and oil. Sanctions and Moscow’s efforts to punish Europe economically for its support for Ukraine risk tipping the region’s largest economy into recession. Its energy sector is reeling from the squeeze on supplies, and government bailouts are quickly being dwarfed by the scale of the crisis.
In parallel to its swoop on Rosneft, Chancellor Olaf Scholz’s government is in advanced talks to take over Uniper SE and two other large gas importers to avoid a collapse of its energy system, Bloomberg reported on Thursday. A decision could come within days. The need for action is urgent with Uniper losing 100 million euros a day as it tries to replace Russian gas with more expensive alternatives.
“Things are complex, we are working it through very carefully,” Economy Minister Robert Habeck said on Thursday.
Seizing the Rosneft unit is an escalation in the economic standoff with Russia as Berlin unwinds decades of tight collaboration. The Schwedt refinery — near the Polish border — has, until now, got its crude via the Druzhba pipeline from Russia. As long as the plant remained significantly in Russian hands, it was hard to see how the facility would keep getting enough fuel to supply Berlin and other parts of eastern Germany.
The government said the move “counteracts the impending threat to the security of energy supply and lays an important foundation for the preservation and future of the Schwedt location,” the Economy Ministry said.
Grid regulator BNetzA will become trustee of RN Refining & Marketing GmbH and Rosneft Deutschland GmbH, which account for around 12% of Germany’s oil processing capacity, through stakes in oil refineries in Schwedt, Karlsruhe and Vohburg. It’s a similar setup to the takeover of Gazprom Germania earlier this year.
Germany has the power to take over the administration of an energy company by issuing an order through the German Energy Safety Act. The order, issued by the Economy Ministry, elapses after six months but can be simply renewed.
Rosneft can challenge the order in German courts.
Scholz and Habeck will present more details on the nationalization plan at a news conference in Berlin later Friday, it added. The government has declined to comment on any plans to nationalize the gas companies.
