Germany takes control of Rosneft subsidiary

Berlin, Sep 16: The German government has taken the German subsidiary of Russian oil giant Rosneft under state control, putting it into the trusteeship of the Federal Network Agency regulator.

Rosneft Deutschland accounts for about 12% of Germany's oil processing capacity and is one of the largest oil processing companies in the country, the Economy Ministry said in a statement.

The ministry added that Chancellor Olaf Scholz, Economy Minister Robert Habeck and Brandenburg's state premier will unveil details of the Rosneft Deutschland package at 1.30 p.m. (1130 GMT).

The government's move to put Rosneft Deutschland into trusteeship follows a similar move by Berlin with SEFE, formerly known as Gazprom Germania, which came under trusteeship after the Russian company Gazprom ditched it in April.

Why has Germany made the move?
With the trusteeship, the Federal Network Agency regulator takes over Rosneft Deutschland's shares in the PCK Schwedt, MiRo and Bayernoil refineries.

The German government cited the need to ensure continued operations at the three oil refineries amid Berlin's resolve to cease oil imports from Russia by the end of the year and European sanctions over Moscow's invasion of Ukraine.

"With the trusteeship, the threat to the security of energy supply is countered and an essential foundation stone is set for the preservation and future of the Schwedt site," the Economy Ministry said in a statement. It said suppliers, insurance companies, IT companies, banks and even customers were no longer willing to work with the company.

The Schwedt refinery in the state of Brandenburg supplies 90% of fuel to the German capital, Berlin. Since its construction some six decades ago, it has received all its crude from Russia via the Druzhba pipeline.

The trusteeship is to be accompanied by a "comprehensive package" that will ensure oil can be supplied to Schwedt via alternative routes, the ministry said.

Rosneft has previously stated that it was not intending to stop importing Russian oil even though an EU embargo is to come into force on January 1, 2023.

The trusteeship is initially due to last six months.

The Federal Network Agency, or Bundesnetzagentur, is the office responsible for regulating the electricity, gas, telecommunications, post and railway markets in Germany. Its main tasks are promoting competition in the sectors for which it is reponsible and for guaranteeing fair and nondiscriminatory access to those networks.

Source: DW