Berlin weighs nationalising Rosneft's German assets

The government in Berlin is considering nationalising the German assets of Russian oil company Rosneft. Reuters reported this today, citing the Russian company's lawyers in Germany. Media outlets speculated about the planned move in recent days, and Germany's economy ministry informed the company of the plan on Tuesday. The company said it would defend its shareholders' rights, while Kremlin spokesman Dmitry Peskov said today that Germany's plans to seize Rosneft shares would undermine investor confidence.

The German government took control of Rosneft's German operations after Russia's military invasion of Ukraine two years ago. The government in Berlin placed Rosneft's German subsidiaries under state trusteeship in September 2022. These companies account for around 12 percent of the country's refining capacity. Berlin has extended the trusteeship, originally set for six months, twice; it is now due to expire on 10 March.

Because „without further state intervention, Rosneft Deutschland may no longer be able to fulfil its supply mandate“, the government „is currently examining the possibility of expropriating Rosneft Deutschland“, an AFP source close to the matter said. The company's law firm added that, according to the German ministry, given the continued invasion of Ukraine by Russian troops, it is unclear whether the situation could change.

The company's law firm said the planned expropriation would be an unprecedented measure in Germany and would permanently damage the country's investment security. Peskov responded in similar terms. Seizing shares in the German subsidiary of the Russian energy giant would have negative consequences and undermine investor confidence and Europe's attractiveness as an investment destination, he said.

Rosneft's German assets include the PCK refinery in Schwedt in the east of the country, in which the Russian group holds a majority stake of 54 percent. The company supplies oil to the capital, Berlin, and the entire surrounding region. Rosneft holds minority stakes in the MiRo refinery in Karlsruhe and the Bayernoil refinery in Vohburg, alongside other major Western oil companies.

According to the Handelsblatt newspaper, the German government summoned Rosneft representatives for a hearing, a formal step ahead of the planned nationalisation. No final decision has been made yet.