Page 8 - FSUOGM Week 47 2021

FSUOGM INVESTMENT FSUOGM

Rosneft expands in German refining

GERMANY RUSSIAN oil giant Rosneft has announced struck a deal in July to offload a 37.5% interest
it is expanding its German refining foot- in the PCK Schwedt refinery to Alcmena, part
Shell is scaling back in print through the purchase of Royal Dutch of Estonia’s Liwathon Group. But Rosneft, like
conventional oil refining Shell’s minority stake in the 230,000 barrel per other shareholders at the plant, had a pre-emp-
as part of its transition day (bpd) PCK Schwedt refinery in the country’s tive right to the interest.
strategy. north-east. PCK Schwedt is one of the most technologi-
Rosneft said on November 17 it had exercised cally complex refineries in Germany, with a Nel-
its pre-emptive right for a 37.5% stake in the son index of 9.8. Rosneft explained it wanted to
refinery, bolstering its share to 91.7%. Subject to “strengthen the technological leadership of the
government and regulatory approvals, the deal refinery, including through the implementation
will bolster Rosneft’s overall refining capacity in of low-carbon projects, considering the current
Germany by 86,000 bpd to 344,000 bpd, estab- environmental agenda of the EU.”
lishing it as the second-largest player after Shell. The Russian company said it was already
“Increasing the share of PCK refinery is testa- developing clean fuel production projects,
ment to the strategic importance of the German including ones for green hydrogen and sustain-
market for Rosneft,” CEO Igor Sechin com- able aviation fuel, and that its work in this area
mented in a statement. “The company builds would continue.
long-term relationships with its German part- “The price of the deal is central here,” VTB
ners, provides timely and uninterrupted crude Capital (VTBC) said in a research note. “We note
supplies, and modernises key refining units.” that despite some recovery in the refining mar-
Rosneft’s other refining assets in the country gins post-COVID, the profitability of refineries
include a 24% interest in the 310,00 bpd Miro in Europe is suffering from CO2 price increases
refinery and a 28.6% stake in the 206,000 Bayer- (up 91% year to date to $76 per tonne).”
noil plants in Neustadt and Vohburg. Following “In addition,” VTBC said, “Rosneft’s CEO
the deal’s completion, its share of German refin- said that the company planned to start imple-
ing capacity will rise from 12% to 17%. menting low-carbon projects at the plant, which
Germany represents Europe’s biggest fuel would mean additional capex. Thus, in general
market, where demand is expected to rebound we deem the news to be neutral to slightly nega-
to the pre-pandemic level this year. tive, albeit while waiting for more details on the
As part of its energy transition plan, Shell is deal value as well as modernisation plans.”
scaling back its conventional refining operations Rosneft did not say when it expected to close
to focus more on low-carbon fuel production. It the deal.™

P8 www. NEWSBASE .com Week 47 24•November•2021