Germany takes subsidiary of Russian oil giant Rosneft under state control

Olaf Scholz Charles Michel Germany Eu Hungary Russia Poland Ukraine city Berlin UPS

16.09.2022 - 10:33

Reading now: 207

theguardian.com:

Germany has taken the German subsidiary of the Russian oil giant Rosneft under state control, putting three refineries into a trusteeship ahead of a partial European embargo on Russian oil at the end of the year.

The federal network regulator will become the temporary trust manager of Rosneft Germany and its share of refineries in Schwedt, near Berlin, in Karlsruhe and in Vohburg, Bavaria, Germany’s ministry for economic affairs announced on Friday.

Rosneft Germany is the country’s largest single oil processing company, accounting for about 12% of its capacity for processing crude oil.

The German chancellor, Olaf Scholz, will on Friday announce further details of a package to support the Schwedt refinery and “ensure that the supply of oil via alternative paths can be secured”, the announcement said.

The refinery on the Polish border, crucial for supplying petrol to the Berlin-Brandenburg region, has until now been reliant on supplies via the Soviet-era Druzhba (“friendship”) pipeline, which takes Russian oil across Ukraine to Europe.

After months of wrangling, the European Union in May agreed to a partial ban on Russian oil, with the aim of cutting off funding to the Kremlin’s war machine. According to the European Council president, Charles Michel, three-quarters of Russian oil imports will be affected immediately, rising to 90% by the end of the year.

Get set for the working day – we'll point you to the all the business news and analysis you need every morning

In a concession to Hungary, Druzhba was exempted from the EU’s embargo, but Germany and Poland have stated their intention to stop using the pipeline for oil deliveries from the end of the year.