Germany seizes subsidiary of Russian oil company Rosneft amid energy crisis.
The German subsidiary of Russian oil giant Rosneft was placed under trusteeship on Friday.
(Reuters)- The German subsidiary of Russian oil giant Rosneft (ROSN.MM) was placed under trusteeship on Friday, giving the German federal regulator control of the PCK refinery in Schwedt, a key fuel source for the city of Berlin.
Rosneft Deutschland, formerly majority-owned by Rosneft, tested Germany's resolve to eliminate oil imports from Russia by the end of the year under European sanctions to punish Moscow for its invasion of Ukraine. See more information.
"With this protection, the threat to the security of the energy supply is combated and an essential cornerstone is laid for the preservation and future of the Schwedt site," the German Ministry of Economy said in a statement.
Rosneft Deutschland, which accounts for about 12% of Germany's oil processing capacity, will be placed under the supervision of the Federal Network Agency regulator, which said the original owner no longer had the authority to issue instructions.
Taking control of Rosneft Deutschland is Germany's latest move to strengthen its energy industry, which is suffering from the effects of the war in Ukraine.
Germany said this week it will increase lending to energy companies at risk of being crushed by soaring gas prices after Russia cut supplies to Europe in retaliation for Western sanctions. See more information
German utility Uniper (UN01.DE) said on Wednesday that the government may take a majority stake, saying a previous €19 billion state bailout package was no longer sufficient. See more information
The government also placed SEFE, formerly known as Gazprom Germania, under trusteeship after the Russian energy giant Gazprom (GAZP.MM) abandoned it in April.
Sources in the German government said before Friday's announcement that all Russian oil supplies could be cut off.
The Schwedt refinery, the fourth largest in Germany and supplier of 90% of Berlin's fuel, has received all of Russia's crude oil via the Druzhba pipeline since it was built in the 1960s. Parts of western Poland are also supplied by Schwedt.
The ministry said Friday's measure includes a package to ensure the refinery can receive oil from alternative routes. This also means that the Federal Network Agency is taking over Rosneft Deutschland's shares in the MiRo refinery in Karlsruhe and the Bayernoil refinery in Vohburg.
It is unclear who could replace Rosneft as operator of the Schwedt refinery. Shell, which holds a 37,5% stake in Schwedt, has wanted to withdraw for some time.
Verbio (VBKG.DE) and Enertrag, both involved in renewable energies, have expressed interest.
Chancellor Olaf Scholz, Economy Minister Robert Habeck, and the Premier of the state of Brandenburg will announce further details at 11:30 GMT.
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