Germany takes control of Russian-owned refinery amid energy crisis

Germany took control of a major Russian-owned oil refinery on Friday, risking retaliation from Moscow as Berlin strives to shore up energy supplies and meet its European Union commitment to eliminate Russian oil imports by the end of the year.

The economy ministry said it was putting a unit of Russian oil firm Rosneft under the trusteeship of the industry regulator and taking over the business' Schwedt refinery, which supplies 90% of Berlin's fuel, Reuters reported on September 16.

"This is a far-reaching energy policy decision to protect our country," Chancellor Olaf Scholz told a news conference to present the government's plans to put the Schwedt refinery under the control of the Federal Network Agency regulator.

The plans included a "package for the future" with more than 1 billion euros ($996.10 million) in federal and state government investments over several years in eastern German states, with 825 million euros earmarked for Schwedt alone.

"Russia, we have known for some time, is no longer a reliable energy supplier," Scholz said. "We did not take this decision lightly, but it was unavoidable."

Governments across Europe have been racing to prop up their power providers and secure fuel deliveries as they ratchet up sanctions on major supplier Russia over its invasion of Ukraine.

Moscow has retaliated by reducing gas flows and has threatened to shut off all the taps, sending prices soaring and raising the prospect of energy rationing in Europe this winter.

The Schwedt refinery has posed a dilemma for Berlin for several weeks, as it has received all of its crude from Russia, but Germany is resolved to eliminate imports of oil from Russia by the end of the year under European Union sanctions.

Taking over Schwedt, however, risks retaliatory measures from Moscow. Scholz said Germany had gamed out a possible sudden stop in crude supplies from Russia, adding: "That is why we are prepared."

A policy document released by Berlin on Friday showed that it is in talks with the government of Kazakhstan on securing oil deliveries for Schwedt.

Poland said earlier this year that ending Russian ownership of the refinery was a condition for potentially supplying it with seaborne oil via a terminal in Gdansk and via Polish pipelines to replace Russian crude.