Germany Still Hasn’t Ruled Out Expropriation of Rosneft’s Assets

By Julianne Geiger - Mar 08, 2024

Germany could still expropriate Rosneft’s German assets, the country’s economy ministry said on Friday, in a warning to the Russian oil giant to propose potential buyers of its assets.

Germany extended its trusteeship over Rosneft’s assets in Germany for the third time earlier this week, but new signs that Rosneft could be open to finding a buyer for its assets in Germany stopped the Energy Ministry from moving to expropriate the assets. Germany said it would need to approve possible buyers to ensure they conform to the Foreign Trade and Payments Act, and it would also be looking at ways to keep Rosneft from buying back in through substitute owners.

The assets in question include three refineries and two other German holdings in Germany’s MiRo and Bayernoil refineries. Rosneft holds a 54.1% stake in the Schwedt refinery in Germany, which, along with other Rosneft assets, has been under a trusteeship since 2022.

It is unclear what the precise value is of Rosneft’s assets in Germany, although estimates have been made in the $7 billion range.

So far, Germany has already nationalized one midstream company, Sefe—assets formerly held by Gazprom.

Russia, too, has gotten into the nationalization game, taking control over Germany’s assets in Russia—Uniper and Wintershall Dea. However, the issue of expropriation may extend beyond Germany’s energy assets, putting Fortum, Carlsberg, Danone, and hundreds of other non-energy businesses that do business in Russia at risk.

German law allows for expropriation to secure its energy supply, which is enforceable under the Constitution based on its benefit to the public.

Germany said last fall that it sees “no way back to energy relationship with Russia that we saw before the way. This relationship has ended.”