Germany wants to do without Russian oil from 2023. This is a problem, especially for PCK Schwedt. Now the federal government intervenes and wants to secure the operation. Other refineries are also affected.
To secure the production of fuel, heating oil and other products, the federal government takes control of the German subsidiaries of the Russian state-owned company Rosneft. This primarily affects the PCK refinery in Schwedt, Brandenburg, which is very important for East Germany, but also two other refineries in Baden-Württemberg and Bavaria. The Federal Ministry of Economics announced this far-reaching decision.
Federal Chancellor Olaf Scholz (SPD) described the decision as a very important step for energy security in Germany. “We now want to take advantage of the opportunities that arise from these decisions. The impasse is over,” said Scholz in Berlin. No employee should fear for their job.
Scholz also described the concept for securing the PCK refinery in Brandenburg as a “far-reaching energy policy decision to protect our state”. Russia is no longer a reliable partner, said the SPD politician. The federal government is doing everything to secure the supply of energy and especially oil.
One billion euros will be invested at the Schwedt site in the coming years as part of a future package. The location and the jobs are thus secured. Nobody in the PCK refinery has to worry about their jobs. Federal Minister of Economics Robert Habeck (Greens) said: “With this day today you can say: The location is secured and the future for Schwedt is being worked out.”
Chancellor speaks to PCK staff
Chancellor Olaf Scholz answered questions from the staff at the PCK refinery in the Brandenburg town of Schwedt after the announcement. The company has a long tradition that is associated with many stories, said the SPD politician on the sidelines of the event.
“That’s why today’s message is: There will still be a time for the future. Oil will be processed here for a long time to come,” says Scholz. But also with a view to the development towards a climate-neutral economy, there will be work here that “corresponds to what has been done so far. That is an important message”.
SPD: 1200 jobs secured
The SPD in the Bundestag expects that all 1200 jobs will be secured with the federal government’s concept for the PCK refinery in Schwedt. Bundestag parliamentary group Vice Verena Hubertz said that without the takeover of the German subsidiaries of the Russian group Rosneft into trusteeship, continued operation would not have been guaranteed.
“On the one hand, we now have more than 1,200 and many thousands more jobs in the Schwedt region,” stressed Hubertz. “On the other hand, the preservation of the refinery is also an important contribution to securing the fuel supply in East Germany, especially in the Berlin/Brandenburg region.” At the same time, a “transformation package” ensures that the location “is operated sustainably, even in generations”.
The background is the oil embargo against Russia because of the Ukraine war, which will take effect on January 1, 2023. The federal government has committed itself at EU level to also avoid using Russian pipeline oil. Up to now, however, PCK has been dependent on this: the refinery has been supplied with Russian oil via the “Druschba” pipeline for decades. According to the Ministry of Economic Affairs, the majority owner Rosneft had little interest in turning away from Russian oil.
Government relies on trust solution
Now the federal government is relying on a so-called trustee solution to take control of Rosneft. Rosneft Germany (RDG) and RN Refining & Marketing GmbH come under the administration of the Federal Network Agency, as announced by the Ministry of Economic Affairs. The Federal Network Agency is also taking control of the respective share in the three refineries PCK Schwedt, MiRo (Karlsruhe) and Bayernoil (Vohburg).
The ministry emphasized that the trusteeship is a reaction to the impending threat to the security of the energy supply and is an essential cornerstone for the preservation of the Schwedt location. For Schwedt there should also be a “comprehensive package for the future” that should bring a “transformation push” for the region and support the refinery so that the supply of oil is secured via alternative delivery routes.
Possible Consequences
PCK fears that Russia could quickly take consequences: “We are preparing for possible short-term restrictions on Druzhba crude oil supplies,” the company said. However, part of the supply is already going through the port of Rostock. “Our focus remains the safe and reliable refinery operation and the supply of the region with mobility and heat.”
PCK has around 1200 employees and is considered the economic pillar of the region around Schwedt. The refinery supplies large parts of north-eastern Germany with fuel. According to the company, Rosneft Germany previously held a 37.5 percent stake there, as did Shell Germany. Rosneft controls further shares via the subsidiary RN, so that the Russian state-owned company has a good 54 percent in total.
“A failure of the operation of the PCK refinery would result in the nationwide supply of petroleum products – and therefore of essential goods – being impaired and endangered, especially in north-eastern Germany,” writes the Ministry of Economic Affairs in the Federal Gazette.
Missing deliveries possible at any time
The PCK refinery should be detached from Russian oil supplies, as these could fail at any time. In order to switch to other suppliers, the port infrastructure in Rostock and the pipeline from Rostock to Schwedt are to be expanded. In addition, oil supplies are needed via a pipeline from the port of Gdansk, Poland. However, the Polish government only wants to make this possible when the Russian shareholders are no longer on board.
On the question of whether oil should now flow to Schwedt via Poland, a ministry spokeswoman said that this decision was up to Poland. But one has been in talks with the government there for months. Tests in recent months have shown that different types of oil can be processed in Schwedt. The spokeswoman could not say exactly how high the expected utilization of the refinery will now be. The oil from Rostock ensures a utilization of about 50 percent, further deliveries are conceivable via the “Druschba” pipeline from Kazakhstan and also via Poland.
Reactions mostly positive
Initial reactions to the announcement by the federal government were mostly positive. The Fuels and Energy industry association called the decision understandable. The coalition partner FDP supports the state intervention. “Wirtschaftswise” Veronika Grimm also welcomed the takeover. “Government intervention makes sense in order to ensure the continued operation of the important oil refinery in Schwedt,” Grimm told the “Rheinische Post”.
The Vice Chairman of the CDU, Jens Spahn, meanwhile expressed skepticism. “What is causing the government to take this measure at this point in time, more than three months before the start of the European oil embargo? How exactly and to what extent is the supply, especially in East Germany, guaranteed?” Spahn told the “Rheinische Post”. He emphasized that the traffic light would be measured against compliance with its previous commitments. Criticism came from the left-wing faction’s representative for Eastern Europe, Sören Pellmann, who called the move away from Russian oil hasty.
Crude oil worth several hundred million euros
According to the ministry, Rosneft Germany accounts for around twelve percent of Germany’s oil processing capacity, making it one of the largest oil processing companies in Germany. According to the Ministry of Economic Affairs, the German subsidiaries RDG and RNRM import crude oil worth several hundred million euros from Russia to Germany every month.
According to the company, the mineral oil refinery Oberrhein (MiRO) in Karlsruhe is Germany’s largest refinery. Shareholders are Phillips 66, Esso, Rosneft and Shell, the site has 1100 employees who produce products such as petrol, diesel or heating oil from crude oil, a total of around 14 million tons per year. According to the company Bayernoil, the refinery in the Bavarian town of Vohburg on the Danube near Ingolstadt produces, among other things, liquid gas, petrol, diesel and heating oil.
The trust administration took effect on Friday and is initially limited to six months. The companies concerned have to bear the costs for this. The Federal Network Agency can thus dismiss and reappoint members of the management board and issue instructions to the management board. The legal basis for trust management is a provision in the Energy Security Act.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
