The German subsidiaries of the Russian oil company Rosneft are nationalized. This is intended to secure the oil supply in this country. It is questionable whether this will succeed. Meanwhile, the Russian parent company is making record profits.
In Germany, another Russian energy company is being forcibly nationalized: As the federal government announced, after the Russian gas supplier Gazprom Germania, Rosneft Deutschland GmbH (RDG), which is majority owned by the Russian oil company Rosneft, and the oil trader Refining, which belongs to Rosneft, are now also being taken over
As with Gazprom Germania, the Federal Network Agency, which reports to the Ministry of Economic Affairs, is responsible for managing the company. In particular, it is entitled to recall and appoint members of the management board and to issue instructions to the management board. It also decides on the assets of the two German Rosneft subsidiaries.
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The basis for this forced nationalization of a private company in Germany is the Energy Security Act. According to this, the state may intervene if it believes that the security of the energy supply would otherwise be endangered.
According to the leading Ministry of Economic Affairs, that is exactly the case here: Rosneft Germany accounts for around twelve percent of Germany’s oil processing capacity, making it one of the largest oil processing companies in Germany.
In Berlin alone, the vast majority of petrol stations are supplied with fuel from the neighboring refinery in Schwedt, which in turn is largely dependent on Rosneft.
Due to the sanctions against Russian companies, numerous business partners such as suppliers, IT companies, banks and insurers are no longer willing to work with Rosneft, according to the Ministry of Economic Affairs. As a result, it was questionable whether the business would have continued to function without the nationalization.
However, the fact that the EU wants to stop importing Russian oil from January 1st is also likely to be decisive. However, the German subsidiaries of the Russian state oil company Rosneft have been importing crude oil worth several hundred million euros from Russia to Germany every month.
It is still completely open how operations in the three refineries PCK in Schwedt, MiRo (Karlsruhe) and Bayernoil (Vohburg) will continue under the then applicable conditions.
Rosneft has a stake in the three refineries. In Schwedt in particular, where an entire region depends on work in the refinery, there is a fear of what will happen without the Russian oil.
The Ministry of Economics announced a “comprehensive package for the future” for Schwedt, which should bring a “transformation push” for the region and support the refinery so that the supply of oil is secured via alternative delivery routes.
Rosneft itself is less affected by the expropriation of the German subsidiaries. The sales of the Russian mineral oil giant are suffering from the sanctions of western countries.
However, the company’s oil continues to enjoy strong demand on the Russian domestic market. The company was also able to increase its profits during the Ukraine war. In the first half of the year, it increased by a good 13 percent to 432 billion rubles (7.2 billion euros).
The result is a secure basis for an interim dividend and a further increase in payments at the end of the year, said Rosneft boss Igor Sechin when presenting the half-year balance sheet. Sechin is considered a close confidant of President Vladimir Putin.
If former chancellor Gerhard Schröder was still on the Rosneft board, he would probably have benefited from it. However, he has since left the board.
In terms of sales, problems related to sanctions are becoming increasingly noticeable. Rosneft announced that it had increased oil sales by 5.7 percent. However, this is mainly due to the Russian domestic market, where Rosneft was able to double its sales. Exports are increasingly being affected by the punitive measures.
The British oil company BP is also involved in Rosneft, which holds 19.75 percent of the shares. After the Russian invasion of Ukraine, however, BP pulled out of joint projects with Rosneft, removed its representatives from the board and wrote off its stake in the group as a loss.
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The article “Habeck nationalizes Rosneft subsidiaries – what’s behind it” comes from WirtschaftsKurier.
