Germany considers nationalizing units of Russia’s Gazprom and Rosneft

  • Germany is considering nationalizing Gazprom and Rosneft units in the country.
  • The two Russian energy giants have a significant footprint in Germany.
  • Germany, Europe’s largest economy, is heavily dependent on Russia for natural gas.

Germany is considering nationalizing Gazprom and Rosneft units in the country, economic newspaper Handelsblatt reported, citing government sources.

The two Russian energy giants have a significant footprint in Europe’s largest economy, with Gazprom Germania operating gas storage facilities and Rosneft Deutschland accounting for a quarter of Germany’s refinery business, according to Handelsblatt.

Berlin is also considering expropriating Gazprom’s assets by forcing the giant to sell its gas storage facilities across Germany. politician reported Friday, citing a government official and two other people briefed on the plans.

Plans to nationalize Gazprom and Rosneft units in Germany, first reported by Handelsblatt on Thursday, were met with the approval of the ruling coalition, the Business Daily reported more on Sunday.

“The situation is serious and requires extraordinary measures,” said Bernd Westphal, spokesman for Chancellor Olaf Scholz’s Social Democratic Party parliamentary energy group, according to Handelsblatt.

If the energy companies were nationalized, they would come under the control of the German authorities, which would loosen Russian influence on energy security in Germany and better guarantee continuity of supply.

The move comes as Germany seeks to bolster the country’s energy security amid the Ukraine war. Last week, Germany activated a Emergency plan to deal with disruptions to its natural gas supply after Russian President Vladimir Putin demanded payment in rubles.

Germany is now in the “early warning phase” of its energy emergency plan, and Berlin calls on all consumers, from industry to households, to conserve energy and reduce consumption. If the situation worsens, the country may start rationing gas in the last of the three-stage plan with industry first in line for power cuts, as described german ministry of economics. The move could devastate the economy and lead to job losses.

Russian gas accounted for 55% of Germany’s gas imports in 2021 and 40% of its gas imports in the first quarter of 2022. Reuters informed. The country has pledged to end the use of Russian gas by 2024, finance minister robert habeck he said in a March 25 press release.

Kremlin spokesman Dmitry Peskov has spoken out against reports that Berlin might nationalize Gazprom and Rosneft units, saying it would be contrary to international law. Reuters reported on Friday.

Not an outlier

Germany is not the only country that has considered nationalizing Russian energy assets since the war in Ukraine began.

In March, financial time and Bloomberg reported that the United Kingdom was preparing to temporarily nationalize Gazprom’s British retail supply unit as it was in danger of collapsing and causing a supply disruption. The UK move appeared to be designed, the FT reported, to save Gazprom’s own unit, as clients abandoned it over the war in Ukraine.

Berlin is also considering restructuring options for Wingas, a unit of Gazprom, Bloomberg reported Friday, citing people familiar with the matter. Wingas supplies about a fifth of the German gas market, according to Bloomberg.

Meanwhile, Gazprom announced on Friday that it had canceled its stake in Gazprom Germania and all of its assets, including Gazprom Marketing and Trading, S&P Global Commodity Insights reported, citing a statement.

The German Economy Ministry, Gazprom Germania and Rosneft Deutschland did not immediately respond to requests for comment from Insider, which were sent outside normal business hours.

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