Germany: Sixth extension of State control of Rosniefti’s assets

On 8 September, the national Ministry of Economy and Energy (BMWE) informed of another – sixth already – extension of the board of trustees of Rosneft Deutschland and RN Refining & Marketing, this time until 10 March 2026. Berlin took control of the assets of Russian company Rosnieftʹ in Germany in September 2022. Germany: taking control of Rosniefti’s assets). Under German law, the board of trustees may be introduced for six months, but may later be extended respective times for a akin period if the State's energy safety so requires. For this time, the formal owner of the company loses his rights to manage the assets and these powers are transferred to the designated entity – in this case the German regulator, the national Network Agency (Bundesnetzagentur).

The decision, published in the national authoritative Journal, stated that the extension of State control of Rosniefti's assets was essential to guarantee the smooth operation of the 3 German refineries in which the Russian company has shares (see map). It was indicated that business partners (including oil suppliers), financial institutions and insurers refuse to cooperate with plants managed by Russian entities. Many contracts supply for clauses allowing the cooperatives to unilaterally break off their cooperation if Rosniefti were reinstated control of the companies. specified a script would lead to paralysis of the operations of refineries of key importance to the country's fuel security.

The paper besides points to a further, 4th agreement already concluded between the Government of Germany and Russia that the company has undertaken to divest German assets – according to the fresh arrangements it has until 28 February 2026.

Comment

• It is becoming clearer that Rosnieft’ is not willing to sale his German assets voluntarily, but simply playing on time, simulating talks. While inactive in the media in 2024 there was information about negotiations with possible buyers (the Qatari Investment Authority and KazMunayGas) confirmed indirectly by the Russian or German side, there were no reports of any advancement in the negotiations this year, and the Qataris were to retreat from the talks.
• A further extension of the board of trustees is simply a fixation of the temporary position quo. From the position of the RFN, the voluntary divestment of shares by the Russians is the most convenient solution in the absence of the ability to return them to control the assets and the deficiency of political will to expropriate them (this option explicitly allows the law, if the country's energy safety so requires). Berlin is afraid of the Russian side's retaliation, which, on the 1 hand, would most likely be directed against many inactive active German companies in Russia and, on the another hand, could be about stopping oil supplies from Kazakhstan to the PCK refinery in Schwedt. Due to the tight budgetary situation of the West Germany, the problem is besides a possible multi-billion-dollar compensation for nationalised assets. Berlin's reluctance to expropriate Rosniefti may besides be affected by aspects related to the global situation, including attempts by the US administration to agree with Moscow on the war in Ukraine. The Minister of economical Affairs and Energy, Katharina Reiche, at a committee gathering in the Bundestag, has stated that the search for a "safe legal" mark to resolve the issue of ownership of the contested shares is presently underway. The opposition parties of the Greens and the Left are openly in favour of expropriation and permanent takeover by the state.
• Due to the deficiency of adequate supply of natural material supplying part of western Poland, the PCK refinery in Schwedt uses only somewhat more than 80% of the processing capacity. This causes the plant to operate on the margin of profitability or, according to the board, to incur losses. The increase in production compared to the erstwhile year (less than 70%) was possible thanks to the increase in oil transmission from Kazakhstan – this year it is expected to scope a full of 2 million tonnes (in 2024 it was 1.5 million tonnes). The main origin of supply for the refinery (6–7 million tonnes per year) remains the port in Rostock, which is liable for the remaining part for the Polish naphthoport in Gdańsk.

Map. Oil transmission infrastructure and refineries in Germany

Source: German Oil manufacture Association (MWV, since 2021 – En2X).