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    Germany seizes control of key refinery in energy battle with Kremlin


    September 16, 2022 - Martina Herzog and Robin Powell, dpa

     

      BerlinGermany has seized control of two subsidiaries of Russian state-owned oil company Rosneft as it attempts to secure the country's energy supplies.

      Germany's Economy Ministry announced that Rosneft Deutschland and RN Refining & Marketing GmbH would be put under the trusteeship of the country's energy regulator, the Federal Network Agency.

      The move, for an initial six months from Friday, crucially brings the major PCK oil refinery in Schwedt in eastern Germany under state control.

      The refinery has been a flashpoint in the battle over energy supplies in the wake of the invasion of Ukraine. It is one of Germany's biggest refineries, and supplies fuel to large parts of Germany's north-east, including the capital Berlin.

      Germany has rushed to cut its dependence on Russian energy sources since the invasion, especially as winter approaches, and an oil embargo on Russia will take effect on January 1, 2023.

      But the refinery in Schwedt is majority-owned by Rosneft, and Berlin says that Rosneft has not supported plans to substitute Russian oil for other sources.

      With Friday's move, the subsidiaries that owned the refinery are now in German hands, along with two other refineries in the city of Karlsruhe and Vohburg.

      The Economy Ministry said the trusteeship was in response to threats to energy supply security.

      "A breakdown in the operation of the PCK refinery would have the consequence that the nationwide supply of petroleum products - and consequently of vital goods - would be impaired and endangered, especially in the north-east of Germany," the ministry said.

      Suppliers, banks and IT companies were no longer willing to cooperate with Rosneft, which has until now controlled around 12% of Germany's oil processing capacity.

      The ministry said it would secure oil supplies to the PCK refinery via alternative routes in a "future package" to be presented later on Friday by Chancellor Olaf Scholz, Economy Minister Robert Habeck and Brandenburg state premier Dietmar Woidke.

      Some 1,200 people are employed at the Schwedt site.

      ©2022 dpa GmbH. Distributed by Tribune Content Agency, LLC.

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