Page 13 - EurOil Week 12 2022

EurOil POLICY EurOil

Germany reviews Rosneft refinery deal

GERMANY GERMANY has put Russian oil producer Ros- acquisitions were considered against the public
neft’s purchase of an extra 37.5% stake in the interest. But the economy ministry did not com-
Germany is cutting ties PCK Schwedt oil refinery under review against ment on the exact reasons for the review.
with Russian energy. the backdrop of Russia’s invasion of Ukraine, the Germany’s cartel office had approved the
German economy ministry reported on March 21. stake purchase on February 21, just three days
Rosneft agreed in November last year to buy before Moscow began its invasion.
the share in the 230,000 barrel per day (bpd) PCK Schwedt is one of the most technolog-
refinery in Germany’s north-east from Shell, bol- ically complex refineries in Germany, with a
stering its equity interest in the facility to 91.7%. Nelson index of 9.8. Rosneft has been striving
The deal would raise Rosneft’s overall refining to expand its refining interests in Germany
capacity in Germany by 86,000 bpd to 344,000 and elsewhere in Europe, in order to lock in
bpd, establishing it as the second-largest refiner demand for its oil. The Schwedt refinery is fed
in the country after Shell. with Russian oil via the Druzhba oil pipeline
However, in the wake of Moscow’s invasion of system.
Ukraine, Germany is cutting its energy ties with Rosneft is headed by powerful Kremlin ally
Russia, having put the Nord Stream 2 project on Igor Sechin, often referred to as Russian Presi-
hold and pledged support for LNG terminals to dent Vladimir Putin’s right-hand man. Sechin,
help wean itself off Russian gas. who has known the Russian leader since the
“Concerning the takeover of additional shares early 1990s, when they both worked in the St
in the PCK refinery by Rosneft, an investment Petersburg mayor’s office, has been placed under
review process has been launched,” the German EU and UK sanctions in response to Russian
economy ministry said in a statement to Reuters. actions in Ukraine. He has been on the US sanc-
Germany has launched such reviews in tions blacklist since 2014, after Moscow’s annex-
the past, when proposed investments and ation of Ukraine’s Crimea peninsula. ™

PROJECTS & COMPANIES

OMV, Wintershall Dea unable to extract

profit from Russian gas project

RUSSIA GERMANY’S Wintershall Dea and Austria’s Wintershall Dea also has interests in Gazprom’s
OMV are unable to extract some RUB42bn Achimov blocks at the Urengoi gas field in West-
The two companies ($390mn) in profit earned at Gazprom’s Yuzh- ern Siberia.
have been hard hit from no-Russkoye gas field in Western Siberia because OMV is less exposed, although it still nets
the fallout from Russia's of Western sanctions, Interfax reported on some 100,000 barrels of oil equivalent per day
invasion. March 22. (boepd) of output from Yuzhno-Russkoye.
While Gazprom and its subsidiaries hold Both companies have said they will not invest
a 50% stake in the field, launched in 2007 further in Russia in light of what has happened
and boasting a production capacity of 25bn in Ukraine. But at the same time, they have not
cubic metres per year, Wintershall Dea and committed to leaving the country altogether.
OMV each have 25% shares. Interfax esti- Defending this position, Wintershall Dea has
mates that Wintershall Dea was entitled to stressed that Yuzhno-Russkoye is a major sup-
RUB23.3bn in profit and OMV a further plier of gas to the European market. OMV has
RUB18bn in 2021. Sanctions that have been meanwhile axed a deal to buy into the Achimov
slapped on Gazprom mean they cannot blocks where Wintershall Dea already works,
access these funds. although the transaction was already years
The two companies have been hard hit from behind schedule.
the fallout from Russia’s invasion of Ukraine, The pair also provided loans to Gazprom’s
as the former country represents significant Nord Stream 2 pipeline, the fate of which is now
portions of their business. Wintershall Dea has up in the air after Germany’s government halted
essentially been cut off from a business that the certification process necessary for its launch.
generates around a fifth of its pre-tax profit. The companies have written these loans off as
In addition to its stake in Yuzhno-Russkoye, impairments. ™

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