In order to secure the energy supply in Germany, the federal government is resorting to radical means.

Economics and Climate Protection Minister Robert Habeck (Greens) temporarily appointed the Federal Network Agency as trustee for Gazprom Germania, the German subsidiary of the Russian energy company, on Monday afternoon.

The background to the decision are unclear legal relationships and the violation of the reporting obligation under the Foreign Trade and Payments Ordinance, the ministry said.

Julia Loehr

Business correspondent in Berlin.

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"The order of the trust administration serves to protect public safety and order and to maintain the security of supply," said Habeck.

"This step is absolutely necessary." He emphasized that the security of supply is still guaranteed.

The sudden decision was preceded by attempts by Gazprom to withdraw its German subsidiary from the federal government's access.

Last week there was an announcement from Russia that Gazprom Germania was to be wound up.

How this was to happen remained unclear, as did the possible consequences.

Then the Russian energy company apparently tried to sell its German subsidiary without applying for the approval required for such transactions under German foreign trade law.

The ministry considered this action to be so serious that it decided to disempower him.  

Until September 30th

The ministry also announced that trustee management by the Federal Network Agency would be ordered until September 30, 2022 on the basis of the Foreign Trade and Payments Act.

As a result, the shareholders of Gazprom Germania GmbH could no longer exercise their voting rights.

The Federal Network Agency is also entitled to dismiss and reappoint members of the management board and to issue instructions to the management board.

The power to manage and dispose of Gazprom Germania's assets will be limited.

The ministry pointed out that it remained unclear who was behind the buyers JSC Palmary and Gazprom Export Business Services LLC. 

Habeck has repeatedly indicated in recent days that he is concerned about ownership of certain parts of the oil and gas industry.

It is about "that we do not expose energy infrastructures in Germany to arbitrary decisions by the Kremlin," stressed Habeck.

The proper management of business in Germany must be secured.

"Our goal will be for Gazprom Germania to be managed in the interests of Germany and Europe," said Network Agency President Klaus Müller.

All steps will be taken to continue to ensure security of supply.

"The business of Gazprom Germania and its subsidiaries should continue to be controlled in this sense."

PCK refinery in Schwedt

The officials in Habeck's ministry have been running through worst-case scenarios for a few days, which also include the possible nationalization of German parts of Russian energy companies.

Gazprom Germania is in focus because the company operates large gas storage facilities in Germany.

Habeck has initiated legal changes, according to which the gas storage tanks must have a certain filling level before winter.

In Berlin, however, there was a suspicion that a plan B was needed in the event that providers did not stick to it. 

In addition to Gazprom Germania, the ministry is also concerned about the PCK refinery in Schwedt.

It is majority owned by the Russian energy group Rosneft and supplies the greater Berlin and Brandenburg area with petrol, diesel, heating oil and kerosene.

A failure in deliveries would have serious consequences for eastern Germany.

Rosneft wants to buy a 37.5 percent stake in the refinery from Shell. 

The Russian group would then own 91 percent of the refinery.

The Federal Cartel Office has no reservations.

However, the Ministry of Economics could slow down the takeover.

The investment review is currently underway, which is particularly strict for critical infrastructure - the review process that Gazprom Germania didn't even want to get involved in.

Should Habeck refuse to sell the PCK shares, the question arises as to who could take over the Shell share instead. 

In 2018, the former Federal Minister of Economics Peter Altmaier (CDU) towed a package from the electricity network operator 50Hertz, which a Chinese group wanted to buy, to the state bank KfW.

Dieter Janecek, economic policy spokesman for the Greens, also thinks that KfW could get involved in the PCK case – but emphasizes that this is not a wishful scenario, but only the ultima ratio if security of supply in Germany is at risk.

"We have to be able to react quickly," says Janecek.

Fast means "within a few weeks". 

Meanwhile, the FDP warns against excessive state intervention: “Expropriating a company takes months, if not years.

And then there is a high probability that lawsuits will be filed against it, ”said the economic policy spokesman for the Liberals, Reinhard Houben.

"We shouldn't expend too much energy on such theoretical considerations." Habeck declined to comment on Monday whether the trusteeship of Gazprom Germania could also be followed by nationalization.