Economy

Germany seizes oil assets of Russia’s Rosneft to end refinery crisis

Germany seizes oil assets of Russia’s Rosneft to end refinery crisis

By Jeffrey Smith

Investing.com – The German government is taking over the domestic operations of Russian oil giant Rosneft, further deepening the rift between the two countries sparked by Russia’s invasion of Ukraine.

The move is aimed at ending the crisis facing Rosneft’s refinery in Schwedt, northeastern Germany, which relies almost exclusively on supplies of Russian crude oil via a Soviet-era pipeline.

The move also covers two other facilities in Karlsruhe in southwest Germany and a Bavarian marketing subsidiary Bayernoil. Finally, Rosneft accounts for 12% of oil refining capacity in Europe’s largest economy. All gas stations in the country will also be subject to state control

“The state administration is addressing the growing threat to the security of energy supplies and laying the foundations for the survival and future of Schwedt,” the Federal Economy Ministry said in a statement, adding that the government would soon announce a “comprehensive” support package. Actions that will include arrangements for the supply of crude oil from other sources. Reports suggested upgrading the transport infrastructure leading from Polish ports on the Baltic Sea.

Chancellor Olaf Schultz and Economy Minister Robert Habeck will provide details of the package at a news conference at 08:30 ET (12:30 GMT).

The government statement did not mention compensation for Russia’s largest oil producer.

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