Germany is set to extend its control over the local subsidiaries of Russian oil company Rosneft for another six months. This marks the fifth time the country has taken such action. In 2022, Germany took over Rosneft’s local units, including three oil refineries, in response to the war in Ukraine. These refineries account for about 12% of Germany’s total refining capacity, with the PCK Schwedt refinery near Berlin playing a key role. Located on the border with Poland, it supplies fuel to the Berlin-Brandenburg region.
The government’s move to seize Rosneft’s assets and bring the refinery under state control was initially seen as a way to avoid potential shutdowns, layoffs, and unrest. However, Rosneft, which remains the legal owner of the assets, has called the seizure illegal. The company has stated that the action amounts to the expropriation of its €4.6 billion investment in refining capacity and has threatened legal action to protect its shareholders.
Rosneft has attempted to sell its German units, including its 54.17% stake in the PCK Schwedt refinery. Meanwhile, Berlin is considering nationalizing the German assets, including this stake. In case of any disruption to Kazakh oil supplies, Poland has assured Germany it could provide crude oil to the Schwedt refinery, claiming it can replace the entire Kazakh volume, around 1-1.2 million tons per year.
Last September, Shell Plc faced difficulties in selling its 37.5% stake in the Schwedt refinery. The deal, which was expected to close in the first half of 2024 with the British Prax Group, hit a roadblock due to pending lawsuits, including one from Rosneft. This legal challenge is part of Rosneft’s ongoing attempt to regain control and prevent the sale to Prax.
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