Germany seizes subsidiaries of Russian energy company

Berlin took control of the German operations of Russian oil company Rosneft on Friday to secure energy supplies that had been disrupted after Moscow invaded Ukraine.

Rosneft’s German subsidiaries, which account for about 12 percent of the country’s oil refining capacity, were placed under trusteeship of the Federal Network Agency, the economy ministry said in a statement.

“Trust management will counter the threat to energy security,” he said.

The repossessions come as Germany is making efforts to wean itself from its reliance on Russian fossil fuels. Moscow has stopped supplying natural gas to Germany through the Nord Stream 1 pipeline.

The move includes the companies Rosneft Deutschland GmbH and RN Refining & Marketing GmbH and with them their corresponding interests in three refineries: PCK Schwedt, MiRo and Bayernoil.

The fear was high, especially for PCK Schwedt, which is close to the Polish border and supplies about 90 percent of the oil used in Berlin and the surrounding region, including Berlin-Brandenburg International Airport.

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Refinery operations were disrupted when the German government decided to cut Russian oil imports, aiming to stop them completely by the end of the year.

By taking control of the sites, the German authorities will be able to carry out the refining activities with crude oil from countries other than Russia.

– Energy earthquake –

Russia’s war in Ukraine has caused an energy earthquake in Europe and especially in Germany, with prices skyrocketing as Moscow’s supplies dwindled.

Germany is severely exposed to its heavy reliance on Russian gas.

Over the years, Moscow had also come to grips with Germany’s oil refineries, pipelines and other gas infrastructure through energy giants Rosneft and Gazprom.

Energy deals with Russia have long been seen as part of a German policy of keeping the peace through cooperation with the regime of Russian President Vladimir Putin.

The cheap energy supplied by Russia was also critical to keeping German exports competitive. As a result, the share of Russian gas in Germany had grown to 55 percent of total imports before the war in Ukraine.

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But that approach has come back to haunt Germany.

In early April, the German government took the unprecedented step of temporarily taking control of the German subsidiary of Gazprom after an opaque transfer of ownership of the company set off alarm bells in Berlin.

Germany is also looking for new energy sources as supplies from Russia have declined following the invasion of Ukraine.

The German government has also taken the stark step of mothballing coal-fired power plants, while putting two of its nuclear plants on standby until April, rather than completely phasing them out as planned by the end of the year.

AFP

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