Germany Extends Its Control Over Rosneft Subsidiaries for an Additional 6 Months

09 Sep, 2023

Germany Extends Its Control Over Rosneft Subsidiaries for an Additional 6 Months

On Friday, the German government announced its decision to extend its control over two subsidiaries of the Russian oil giant Rosneft for an additional six months. This move comes one year after the government initially placed Rosneft Deutschland GmbH and Rosneft Refining and Marketing GmbH under the jurisdiction of Germany's Federal Network Agency. In March, a German federal court rejected Rosneft's complaints and upheld this decision.

This trusteeship arrangement granted German authorities control over three Russian-owned refineries, at a time when Rosneft constituted approximately 12% of Germany's oil refining capacity. The Economy Ministry confirmed on Friday that they are prolonging the trusteeship until March 10, 2024, citing the need to safeguard the country's energy supply.

The Rosneft subsidiaries own a refinery located in Schwedt, near the Polish border northeast of Berlin, which supplies petroleum products to the capital and a significant portion of northeastern Germany. Initially, it heavily relied on Russian oil, but it has since transitioned to receiving oil from the Polish port of Gdansk and Kazakhstan.

In the March ruling, the Federal Administrative Court determined that the government was not obligated to provide Rosneft with a hearing before taking action in these circumstances. It cited indications of potential capital withdrawal, which raised concerns about the subsidiaries' possible collapse—a scenario the government sought to prevent, similar to its takeover of Gazprom's former German unit.

Subsequently, Germany nationalized the former Gazprom unit, which was renamed "Securing Energy for Europe."