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Germany Seizes Control Of Russian-Owned Refinery

The German government today put the local business of Russian Rosneft under trusteeship, handing control over the Schwedt refinery to the country’s energy market regulator, Reuters reported, citing a government statement.

"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," Berlin said in the statement.

Schwedt is the fourth-largest refinery in Germany, it is 54 percent owned by the Russian state oil giant, and it gets its oil from the Druzhba pipeline. It supplies 90 percent of Berlin’s fuel needs.

Germany has been seeking options to take control of the facility for months now as it pledged to end its imports of Russian crude. The alternative discussed for Schwedt was shipments of oil via another pipeline from Poland to Germany.

Among the other options considered earlier this year was to make Shell operator of the facility, but the supermajor reportedly had no interest in becoming the operator of the refinery. Another option was to hand control of the refinery to Poland’s PKN Orlen, which insisted that Rosneft is first kicked out before it assumes operatorship.

Expropriation of the assets was also on the table but there were fears Russia would retaliate by cutting natural gas deliveries to Germany if it tried to take over Schwedt. Now that Russia has already cut off shipments via Nord Steam 1, taking over has clearly become an acceptable course of action.

Rosneft Deutschland is the second energy major in the country that will now be under the control of the Federal Network Agency after earlier this year the government tasked it with taking over the German business of Gazprom. The Russian gas major quit Germany in April and Gazprom Germania was put under trusteeship.

By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on September 16 2022 said:
    By seizing control of the Schwedt refinery which is 54% owned by Russia’ oil giant Rosneft, Germany has opened the door wide for Russia to nationalize the assets of some of the 6,300 German companies operating on its territory and also to take further measures to suffocate Russian gas supplies to Germany.

    Neither Germany nor the EU can win a tit-for-tat retaliation battle with Russia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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