How Putin had Germany under control

The tragedy of misguided German energy policy in a single (satellite) photo! (I took it from Apple Maps.)

The picture shows PCK Raffinerie GmbH, an oil processing plant near the city of Schwedt in the east of Germany (I was hiking there this weekend but didn’t come near the plant, so no photos, sorry).

With its 1,200 employees, the refinery supplies 95 per cent of Berlin and the surrounding federal state of Brandenburg with fuel, i.e. petrol, diesel, jet fuel and heating oil.

The refinery thus has a regional monopoly. 

That’s ugly enough. But it’s even worse.

The owner of this monopoly is Rosneft, a company majority-owned by the Russian state and specialised “in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petroleum products.”

Until recently, the monopoly was all-encompassing. Rosneft drilled for oil and gas in Siberia, transported it to Germany, processed it and sold it.

Does anyone know of a more complete monopoly? I don’t.

Initially, several companies held stakes at PCK Raffinerie. In 2015 and 2016, Rosneft had already increased its stake by acquiring the shares of Total and BP. In 2021, the Russian company announced that it would also take over Shell’s sharesand thus increase its shares to 91.67 per cent (the rest, 8.33 per cent, belongs to Eni Deutschland GmbH, a German subsidiary of an Italian mineral oil and energy group). The German Federal Cartel Office cleared the transaction on February 21, 2022, three days before the Russian invasion war in Ukraine started.

However, the takeover was not completed. Shortly after that, the Federal Ministry of Economics initiated an investment review following the so-called Foreign Trade and Payments Act to check whether the public order or security of the Federal Republic of Germany was endangered. 

The situation is different now, anyway. Germany has placed the refinery in Schwedt under trusteeship. By this, the Federal Network Agency, the German regulatory office for electricity, gas, telecommunications, mail and railway markets, took over. 

Since then, the refinery has been trying to become independent of Russian oil. This is urgently needed. Because after December 5, Russia is not allowed to deliver oil anymore. The EU will ban Russian crude imports from that date on. 

A new era is beginning in Schwedt. It could be a good one. 

In November, crude oil unloaded from tankers in the port of Gdansk (Poland) flowed to Schwedt for the first time – via the “Pomeranian” branch line to the Polish part of the crude oil route through which Russian oil previously flowed. Plus, there is already a pipeline from the German port of Rostock to Schwedt, and a second one is to be built

However, the actual future will probably be in hydrogen. 

The additional pipeline will initially be used to obtain even more crude oil for the refinery via Rostock. But it is to be built so it can also be used to transport hydrogen in a few years. 

The oil refinery is about to start producing hydrogen. The first plant for hydrogen production will soon be built on the PCK site in Schwedt. 

This development is supported with money from the state. In the coming years, the city and the company north of Berlin will have 325 million euros in federal funding to enable sustainable refinery restructuring.

How quickly things can change. A few months ago, Vladimir Putin probably thought he had a firm political grip on Germany with its energy dependency. And he had. In almost no time, Germany has lost some of this dependency – an example of how crises can improve things.

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