Germany is set to extend its trusteeship over Russian oil company Rosneft’s local subsidiaries for another six months, marking the fifth time it has done so. Back in 2022, Germany seized the local units of Rosneft and Gazprom, including three oil refineries. Together, the three refineries run by Rosneft Germany provide some 12% of the country’s total refining capacity, and the PCK Schwedt refinery near Berlin is key. This refinery, on the border with Poland, supplies fuel to the restive Berlin-Brandenburg region.
Seizing Rosneft’s assets and placing the refinery under state control was initially viewed as a political move that staved off a shutdown and layoffs, and prevented possible unrest. Rosneft–still the legal owner of the Germany asset–protested against the seizure calling it illegal and said it amounts to an expropriation of equity assets in which it had invested €4.6bn in refining capacity. In a company statement, the Russian oil giant said it would “consider all possible measures to protect its shareholders, including legal action”.
Rosneft has been trying to sell its German units, which include a 54.17% stake in the PCK Schwedt refinery. Berlin, on the other hand, is looking to nationalize Rosneft’s German assets, including its 54.17% stake in the Schwedt refinery. Poland has reassured Germany that it could step in and supply the Schwedt refinery with crude if Kazakh oil supplies were halted in possible retaliation for Berlin’s moves against Rosneft. Poland says it’s capable of replacing the whole Kazakh volume, about 1-1.2 MMtpy.
Last September, Shell Plc’s (NYSE:SHEL) planned sale of its stake in the Schwedt refinery encountered challenges due to pending lawsuits by third parties, Reuters reported. Shell’s planned sale of its 37.5% stake in the refinery to Britain’s Prax Group, was expected to close in the first half of 2024; however, the deal hit a snag after Berlin stripped majority owner Rosneft of its control, but not its shares, and put it under a trusteeship shortly after Russia invaded Ukraine in 2022. The lawsuits include an attempt by Rosneft to prevent the sale to Prax.
