Germany seizes Russian energy firm's subsidiaries

Berlin on Friday took control of the German operations of Russian oil firm Rosneft to secure energy supplies which have been disrupted after Moscow invaded Ukraine.

Rosneft's German subsidiaries, which account for about 12 per cent of oil refining capacity in the country, were placed under trusteeship of the Federal Network Agency, the economy ministry said in a statement.

"The trust management will counter the threat to the security of energy supply," it said.

Chancellor Olaf Scholz said his government "did not take this action lightly but it was inevitable" for the "protection of our country".

The seizures come as Germany is scrambling to wean itself off its dependence on Russian fossil fuels, while Moscow has stopped natural gas deliveries to Germany via the Nord Stream 1 pipeline.

The German government's move covers the companies Rosneft Deutschland GmbH (RDG) and RN Refining & Marketing GmbH (RNRM) and thereby their corresponding stakes in three refineries: PCK Schwedt, MiRo and Bayernoil.

In a statement on Friday, Rosneft denounced the move as illegal and "a violation of all the basic principles of a market economy".

The company was examining all possible measures to protect its shareholders, including taking court action, it added.

Fears had been running high particularly for PCK Schwedt, which is close to the Polish border and supplies around 90 per cent of the oil used in Berlin and the surrounding region, including Berlin-Brandenburg international airport.

The region could have "found itself in a position, due to the refinery in Schwedt, where security of supply was no longer a given", Economy Minister Robert Habeck said at a press conference.

The refineries' operations had been disrupted as the German government decided to slash Russian oil imports, with an aim to halt them completely by year's end.

By taking control of the sites, the German authorities can then run the refining operations using crude from countries other than Russia.

New supplies of oil for Schwedt have been shipped in via the northeastern port of Rostock, with plans to also tap supplies imported through the Polish city of Gdansk.

The government plans to "strengthen" the pipeline between the Schwedt refinery and Rostock, while advancing discussions with officials in Warsaw about establishing a link — an option which was not available "so long as it was possible that any profits would go to Rosneft, to Russia", said Habeck.

With winter approaching, Germany has fired up mothballed coal power plants. It is also putting two of its nuclear power plants on standby until April, rather than phasing them out completely as planned by year's end.