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ENERGY

Germany seizes Russian energy firm’s subsidiaries

Berlin on Friday took control of the German operations of Russian oil firm Rosneft to secure energy supplies which have been disrupted after Moscow invaded Ukraine.

Crude oil processing facilities on the site of PCK-Raffinerie GmbH in Schwedt/Oder.
Crude oil processing facilities on the site of PCK-Raffinerie GmbH in Schwedt/Oder. To secure the operation of refineries, the German government is placing crude oil importers Rosneft Deutschland (RDG) and RN Refining & Marketing GmbH under control of the Federal Network Agency. Photo: picture alliance/dpa | Patrick Pleul

Rosneft’s German subsidiaries, which account for about 12 percent of oil refining capacity in the country, were placed under trusteeship of the Federal Network Agency, the economy ministry said in a statement.

“The trust management will counter the threat to the security of energy supply,” it said.

The seizures come as Germany is scrambling to wean itself off its dependence on Russian fossil fuels. Moscow has stopped natural gas deliveries to Germany via the Nord Stream 1 pipeline.

The move covers the companies Rosneft Deutschland GmbH (RDG) and RN Refining & Marketing GmbH (RNRM) and thereby their corresponding stakes in three refineries: PCK Schwedt, MiRo and Bayernoil.

Fears had been running high particularly for PCK Schwedt, which is close to the Polish border and supplies around 90 percent of the oil used in Berlin and the surrounding region, including Berlin-Brandenburg international airport.

The refineries’ operations had been disrupted as the German government decided to slash Russian oil imports, with an aim to halt them completely by year’s end.

By taking control of the sites, the German authorities can then run the refining operations using crude from countries other than Russia.

Energy earthquake

Russia’s war in Ukraine has set off an energy earthquake in Europe and especially in Germany, with prices skyrocketing as Moscow dwindled supplies.

Germany has found itself severely exposed given its heavy reliance on Russian gas.

Moscow had also built up a grip over Germany’s oil refineries, pipelines and other gas infrastructure through energy giants Rosneft and Gazprom over the years.

Energy deals with Russia were long seen as part of a German policy of keeping the peace through cooperation with Russian President Vladimir Putin’s regime.

The cheap energy supplied by Russia was also key in keeping German exports competitive. As a result, the share of Russian gas in Germany had grown to 55 percent of total imports before the Ukraine war.

But that approach has come back to haunt Germany.

READ ALSO: When will effects of Russian gas shut-off be felt in Germany?

In early April, the German government took the unprecedented step of temporarily taking control of Gazprom’s German subsidiary, after an opaque transfer of ownership of the company sent alarm bells ringing in Berlin.

Germany has also been scrambling to find new sources of energy as deliveries from Russia have dwindled in the wake of the invasion of Ukraine.

The German government has also taken the stark step of firing up mothballed coal power plants, while putting two of its nuclear power plants on standby through April, rather than phasing them out completely as planned by year’s end.

READ ALSO: What to know about Germany’s new energy saving rules

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ENERGY

German energy firm RWE takes Gazprom to court over supply halts

German's RWE said Tuesday it is taking legal action against Russia's Gazprom over halted gas supplies, the latest German company to do so since Moscow invaded Ukraine.

German energy firm RWE takes Gazprom to court over supply halts

Following the invasion, Gazprom steadily dwindled pipeline supplies to Germany in apparent retaliation for Western sanctions on Russia, sending energy prices soaring.

Last week, German energy giant Uniper said it was seeking damages from Gazprom at an international tribunal, as the Russian company’s failure to deliver gas had cost them billions of euros.

READ ALSO: Germany’s Uniper takes Gazprom to court over halted gas supplies

An RWE spokeswoman confirmed to AFP the company had also launched action, but declined to give further details.

Gazprom’s failure to deliver promised supplies has meant that German companies, long heavily reliant on Russian energy, had to buy gas on world markets at far higher prices.

Financial daily Handelsblatt reported that the costs incurred by RWE were likely lower, at around €1 billion, than those faced by Uniper.

Uniper had far larger contracts, and has put its losses from the supply halts at €11.6 billion. Gazprom has rejected Uniper’s claims.

The company, Germany’s biggest gas importer, has agreed a deal to be nationalised after Russia’s drastic reduction in supplies pushed it to the brink of bankruptcy.

READ ALSO: How Germany became ensnared by Russian gas

It reported a €40 billion net loss for the first nine months of the
year, one of the biggest losses in German corporate history.

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