German government nationalises Rosneft refinery to protect energy supply

The German government has put the German subsidiary of Rosneft under trusteeship, a move which nationalises the refinery.

Located in Schwedt, Germany, the refinery was majority owned by Rosneft , the Russian oil giant, but is now in the hands of the Federal Network Agency as Europe’s energy war rumbles on.

At the end of last month, Gazprom, Russia’s state-owned energy company, shut down Nord Stream 1, stopping the flow of gas into Europe with no timeline given as to when or if it would even be turned back on.

Schwedt is Germany’s fourth-largest refinery and supplies 90% of Berlin’s fuel.

“With the trusteeship, the threat to the security of energy supply is countered and an essential foundation stone is set for the preservation and future of the Schwedt site,” the German economy ministry said, cited in a report by Reuters.

Oil at the refinery usually comes from Russia, but the move to nationalise is part of a package designed to ensure oil can be supplied from elsewhere.

What today’s announcement means for BP remains to be seen. The FTSE 100 oil and gas giant said it would be ditching its 19.75% stake in Rosneft following Russia’s invasion of Ukraine in February this year.

However, Igor Sechin, Rosneft’s chief executive, confirmed that up to June, BP remained the group’s largest private shareholder.

BP’s stake in Rosneft accounted for about half of its oil and gas reserves and a third of production, although the group has written down the investment and no longer includes any share of Rosneft in its earnings accounts.

Rosneft paid a dividend of £404mln to BP before Russia’s invasion of Ukraine to cover the first half of 2021, according to the Telegraph.

Although BP is entitled to a second-half payout, probably worth £1.2bn, Russia banned dividends to overseas shareholders, so it is unclear whether or not BP will ever receive this money.