Germany Extends Rosneft Trusteeship, Avoiding Nationalization

Following Russian Rosneft’s move to sell its refinery assets in Germany last week, Berlin on Thursday announced it would extend its trusteeship over the local Rosneft subsidiaries until mid-September to avoid nationalization. 

This is the third time Germany has extended the trusteeship of Rosneft PJSC, with the new extension set to expire on September 10, giving Moscow time to divest its assets. The current trusteeship period was set to expire on March 10. 

Last week, Rosneft launched a sales process seeking to divest its German assets, which include a majority stake in a major refinery. 

Germany placed the local assets of state-run Rosneft under trusteeship in September 2022, following Russia’s invasion of Ukraine earlier that spring. Control of the key Schwedt refinery was handed over to Germany's energy market regulator in a bid to counter the threat to energy supply security. The Schwedt refinery is the fourth-largest in Germany and is 54% owned by the Russian state oil giant. Oil feeding the refinery comes from the Druzhba pipeline from Russia. The Schwedt refinery supplies 90% of the fuel needs of Germany’s capital city Berlin.  

Rosneft is Germany's third largest petroleum refinery company, processing roughly 12.5 million tons of crude oil per year; that's more than 12% of the Federal Republic of Germany's total processing capacity, according to Rosneft Germany. 

In February, news reports circulated in which government sources had said Berlin was considering nationalizing the assets, which prompted a series of direct talks between Rosneft chief executive Igor Sechin and Berlin over the past few weeks. 

At the time, Rosneft warned Berlin that any nationalization move would “damage the safety of investment forever” and that the company would take “all necessary measures” to protect its shareholders, the Financial Times reported.

By Charles Kennedy for Oilprice.com

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