Obstacle to embargo: Bundestag debates expropriation of Rosneft

Since the beginning of the Ukraine war, Germany has already been able to significantly reduce its dependence on Russian oil - but there is still one obstacle on the way to a possible embargo: the PCK refinery in Schwedt in Brandenburg, which is controlled by the Russian state-owned company Rosneft.

In order to solve the problem, an amendment to the Energy Security Act should create the basis.

It was discussed for the first time in the Bundestag on Friday.

The federal government should therefore be empowered to place the refinery in Schwedt under state trusteeship or even to expropriate it.

The refinery in Schwedt is supplied with oil via the Druzhba pipeline and plays a key role in supplying the east.

Nationwide, Russian imports covered 35 percent of German oil consumption before the start of the war.

This proportion has now been reduced to twelve percent, as Economics Minister Robert Habeck (Greens) said this week.

These twelve percent are solely oil imports from the refinery in Schwedt.

Rosneft's business model is to buy Russian oil.

If you no longer want this oil, you need an alternative for Schwedt.

That alternative could be to place the refinery under state supervision - as in the case of the German Gazprom subsidiary.

Habeck had appointed the Federal Network Agency as a trustee for this.

However, this happened on the basis of foreign trade law and was possible because the company was to be taken over by another Russian company.

Habeck justified the trust administration with unclear legal relationships and a violation of reporting regulations.

Energy Security Act of 1975 as a basis

In the case of Rosneft, the Energy Security Act could now form the basis for state supervision.

Expropriation would also be possible.

The law, which dates back to 1975 as a reaction to the oil crisis, already provided for such a thing.

In the now planned amendment, however, the possibilities are to be defined more clearly.

The draft law states that expropriations could be carried out to secure the energy supply.

The parliamentary state secretary in the Ministry of Economic Affairs, Oliver Krischer (Greens), who represented Habeck, who tested positive for the corona virus, said in the Bundestag that it had been seen that Russian President Vladimir Putin used energy imports as a weapon - Russia had stopped gas deliveries to Poland and Bulgaria.

"But we will not be intimidated, our policy is geared towards arming ourselves in the event that the situation worsens," said Krischer.

"The better prepared we are, the faster and more comprehensively we act, the better we can deal with the crisis."

As an "ultima ratio" - i.e. as a last resort - it must also be possible to expropriate companies under clearly defined and very strict conditions.

It cannot be that someone who owns a critical infrastructure for the energy supply endangers this supply.

Shell comes into play

The FDP energy politician Michael Kruse said: "Anyone who abuses critical infrastructure in Germany against German and European interests can no longer be the owner of this critical infrastructure." SPD MP Bengt Bergt said: "As an absolute last resort, we must can also resort to the crowbar of expropriation.”

In order to be able to act quickly, the law should be passed quickly.

That could be the case in mid-May.

There is also another lever: Rosneft wants to take over the refinery in Schwedt almost completely, but this is currently being examined by the Ministry of Economic Affairs.

But where should a replacement come from if Schwedt was no longer supplied with Russian oil?

On the one hand, oil could be landed by ship via the port in Gdansk, Poland, which could then be brought to Schwedt.

Schwedt could also be supplied from the Baltic Sea port of Rostock.

Schwedt could also run under the Shell oil company again.

He had sold his shares in Rosneft.

But now Brandenburg's Economics Minister Jörg Steinbach (SPD) told the Reuters news agency.

Shell is willing to be there for the site, even if it means accepting financial losses.

A spokeswoman for Shell in Germany declined to comment on Friday.

The background is probably that the Federal Ministry of Economics intervened when Shell sold its shares to Rosneft and initiated a so-called investment review procedure, with which the transaction could still be prevented.

Habeck caused a stir on Tuesday with the statement that an oil embargo against Russia was "manageable" for Germany.

He said on ZDF on Thursday evening that Germany could go along with an embargo.

If the time had come tomorrow, there would be delivery failures and enormous price increases: "It still hurts a lot, but we will no longer experience a national catastrophe." At the same time, Habeck said that an embargo had to be designed wisely.

There is a risk that, in the event of an embargo, prices around the world will rise to such an extent that Putin will end up getting more money with less oil.