Germany Confiscates 3 Russian-Owned Refineries Worth $4.6 Billion

The follies of Russian state investment in Germany come home to roost

The follies of Russian state investment in Germany come home to roost

“Germany closes long energy chapter with Russia by turning on Rosneft”

Source: Financial Times

In May 2017, Rosneft chief executive Igor Sechin came to Berlin to outline a five-year plan to double the Russian oil company’s investments in German refining to €600mn.

Cut to 2022 and Rosneft’s assets have been taken over by the German government. Sechin’s dream of downstream expansion into Europe’s largest oil products market is in ruins, a victim of the escalating energy war between Russia and the west.

On Friday, the German government said it was seizing control of Rosneft’s stakes in three German refineries — PCK in Schwedt, north-east of Berlin, MiRo in Karlsruhe and Bayernoil in the Bavarian town of Vohburg.

The trigger for the takeover was the looming EU ban on imports of Russian oil, which comes into force on January 1 and could put massive pressure on Germany’s refining industry. Russia has already severed natural gas supplies to Germany threatening a deep recession in the country this winter.

Berlin has had some success in finding alternatives to Russian crude, but the Schwedt plant presented a problem: not only does it sit right on top of a Russian pipeline, the 4,000km-long “Druzhba” or friendship line, but it is also 54 per cent owned by Rosneft, a company with little interest in refining non-Russian oil at the site.

The government, which is placing the Rosneft stakes under the trusteeship of the federal energy regulator, the Bundesnetzagentur, said Russian ownership of Schwedt and the other two refineries jeopardised their business operations.

“Key, critical service providers such as suppliers, insurance companies, banks, IT companies, but also customers, were no longer prepared to work with [sanctioned] Rosneft,” the economy ministry said.

It is all a far cry from Sechin’s press conference in 2017, which marked the opening of Rosneft Deutschland’s new Berlin office. It was a time when German-Russian relations were on an even keel and the Kremlin was still seen by many in Germany as a reliable partner.

The optimists were personified by Michael Harms, head of the Ost-Ausschuss, the principal lobby for German investors in Russia. Appearing next to Sechin, one of President Vladimir Putin’s closest confidants, he said Rosneft’s new Berlin representation was “proof of Russia’s unwavering commitment to the European market”.

German-Russian trade had, he added, “risen dramatically” in the first two months of 2017, and the expectation was that “it will grow by 10 per cent this year, if not more”.

Sechin echoed his assessment. The volume of trade between Russia and Germany had risen fourfold between 2000 and 2013 to €56bn, with German imports from Russia tripling to €27bn and German exports to Russia rising sevenfold to €29bn. “And it’s not just oil deliveries and oil refining, but also technological co-operation,” he said, alluding to the massive market Russia had become for German manufacturers.


Rosneft said the move amounted to an expropriation of equity assets in which it had invested 4.6 billion euro ($4.6 billion) for refining capacity, according to a company statement late Friday.


The landlocked refinery is the source of 90% of Berlin’s fuel and has received all its crude from Russia via the Druzhba pipeline since the plant was built in the 1960s.

The refinery, brought under state control under Germany’s energy security law, can continue to operate but not at full capacity, a spokesperson for the economy ministry said on Friday.

  1. Traveller says

    Moronic step, if ever was any. Those refineries can only process russian oil of Ural brand, and are useless for anything else. So, absolutely meaningless act of thievery, without any practical valute.

    Also, cannot blame Russia for thinking they are dealing with law-abiding countries when they were making those investments.
    I was surprised myself that Germany has gone the way of americans and brits,and angaged in outright theft. Quite sad, frankly.

    1. kiwi says

      Germany has,nt been a sovereign nation since 1945, global bankers control Germany aka the US

      1. Traveller says

        Yes, that is absolutely true. Both Germany and Japan has been occupied by USA in 1945 and has been under military occupation ever since. It is undisputable fact.

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