Germany, belatedly it must be said, in an attempt to achieve some energy independence seized the German unit of Russian oil major Rosneft PJSC. Readdressing the dependance to Russia and the disaster that has come since the Ukraine invasion has been a slow and indecisive one by Germany. Germany looks to secure supplies and sever decades of deep dependence on Russia for energy.
Bloomberg reported on Thursday that German administration is in advanced talks to take over Uniper SE and two other major gas importers following an earlier bailout. Uniper is said to be losing 100 million euros a day as it tries to replace Russian gas to maintain deliveries to its local utilities and manufacturers.
“Over the next few months, we’ll have to continue to preserve critical infrastructure in order to achieve energy independence,” said Verena Hubertz, a leading lawmaker for Scholz’s Social Democrats. “Further measures will follow.”
On Friday, the government announced it was taking over Rosneft’s German unit, including stakes in three oil refineries. The move also affects holdings in France, Italy and Austria, highlighting how interconnected Europe’s energy system is.
Grid regulator BNetzA will become the trustee of Rosneft Deutschland GmbH and RN Refining & Marketing GmbH, which account for around 12% of Germany’s oil-processing capacity, through stakes in refineries in Schwedt, Karlsruhe and Vohburg. The process is similar 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 trusteeship runs until March 15, 2023, but could be renewed. Rosneft can challenge the order in German courts.
Germany is preparing to stop buying Russian crude by the end of the year and is moving quickly given the latest threats by Russian leader Putin to cut off oil and gas supplies to the West and in particular Europe.
“This is a very important step for energy supply in Germany,” Scholz said at a press conference in Berlin. “We are making ourselves more independent from Russia, and also from decisions that are taken anywhere there.”
The takeover of the Rosneft unit accelerates the aggressive response needed to make headway into rebalancing the escalation of the economic standoff with Russia. The significance is the Schwedt refinery near the Polish border, which supplies Berlin and much of eastern Germany with energy. The plant was fueled its crude via the Druzhba pipeline from Russia.
The German Economy Ministry 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.”
Bloomberg reported the refinery is now preparing for potential retaliation from Russia, such as short-term restrictions in the crude supplied via the Cold War-era Druzhba link, operator PCK Raffinerie GmbH said in a statement.
Now under German control the refinery will by fueled by upgrading a pipeline linking it to the east German port of Rostock. Bloomberg said other deliveries could come via Poland and talks with the government are under way.
“Purchasing shares in the refinery is one of the options” being discussed, Polish Climate Minister Anna Moskwa told Bloomberg in Vilnius.
Scholz said the trustee structure is designed to maintain oil refining in Schwedt next year and Germany’s energy supplies are secured through this winter, even if Russia halts crude deliveries.
Overall, a long-term support package for the Schwedt site and the surrounding region totals more than 1 billion euros.
Source: Bloomberg, TC
From the TradersCommunity News Desk