Germany has taken control of a Russian-owned major oil refinery. Moscow may retaliate as Berlin tries to boost energy supplies and fulfil its European Union commitment to end Russian oil imports by the year’s end.
According to the economy ministry, it would place Rosneft’s unit under the supervision of the regulator and take over Schwedt’s refinery which supplies Berlin with 90% of its fuel.
The country’s energy regulator, Vohburg, Schwedt, Karlsruhe, and Vohburg will be in control of the stakes in these oil refineries. This is equivalent to approximately 12% of Germany’s oil processing capability.
This move is similar to Berlin’s earlier decision to take control of Gazprom Germania.
The Government of Chancellor Olaf Scholz is also considering the nationalization of Uniper, an energy giant that already needs more funding after it used a EUR19bn assistance package in July. Ministers also want a stake in VNG, an energy company.
This is a further escalation of the standoff between Europe and Russia and highlights the efforts made by countries to ensure their energy supplies.
Shell, which owns 37.5% of the PCK Schwedt oil refining plant, stated that it was not affected by Germany’s decision.
“This is an important energy policy decision to protect the country,” said Chancellor Olaf Scholz at a news conference. He presented the government’s plans for putting the Schwedt refinery under the control of the Federal Network Agency.
Plans included a “package to the future” that included more than 1 Billion Euros ($996.10 Million) in federal investments and state investments over many years in eastern German countries. Schwedt was allocated 825 MILLION EUROS.
Scholz stated that Russia, which we knew for a while, was no longer an energy supplier reliable, and he agreed with this statement. “This decision was not taken lightly, but it was inevitable.”
As Russia invades Ukraine, major suppliers in Russia are being targeted by European governments.
Moscow has responded by reducing gas flows and has threatened to turn off all the water taps. This has sent prices skyrocketing and raised the possibility of European energy rationing this winter.
Berlin has been facing a problem with the Schwedt refinery for many weeks. It has been receiving all its crude oil from Russia for the past several weeks. However, Germany has resolved to end Russian oil imports by the end of the year, as per EU sanctions.
However, Moscow could retaliate if Schwedt is taken over. Scholz stated that Germany had prepared for a sudden stoppage in Russian crude oil supplies and added: “That’s why we are ready.”
Berlin released a policy document on Friday that showed it was in negotiations with Kazakhstan to secure oil supplies for Schwedt.
Poland stated earlier this year that it was necessary to end Russian ownership of the refinery in order to supply it with seaborne oil via the Gdansk terminal and through Polish pipelines to replace Russian crude.
Rosneft Germany, which was owned majority by Russia’s oil group and accounts for roughly 12% of German oil processing capability, will be placed under the caretakers of the Federal Network Agency.
The regulator stated that the original owner had lost the authority to issue instructions.
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