Schwedt Oil Refinery's Future Hangs in Balance Amid Ownership Uncertainty

Germany's Schwedt oil refinery operates at over 80% capacity despite ownership uncertainties. With Russian firm Rosneft owning a majority stake, the refinery has faced supply issues post-Ukraine invasion. Germany seeks alternative supplies, with potential support from Kazakhstan, amid federal plans for pipeline upgrades.

Germany's Schwedt oil refinery is currently functioning at over 80% capacity despite uncertainties regarding its future ownership, according to German state secretary Michael Kellner.

Russian energy giant Rosneft holds a majority stake in the PCK Schwedt refinery, historically supplying 90% of Berlin's fuel. The facility operated at just 50-60% capacity last year after Germany ceased oil supplies from Russia following the Ukraine invasion and subsequently placed the refinery under government trusteeship.

Kellner welcomed Kazakhstan's proposal to increase supplies but cautioned about the risk of Moscow halting shipments via the Druzhba pipeline. Despite potential increases, Kazakhstan has already declared a 19% reduction in oil exports to Germany. Germany is collaborating with Poland to secure alternative supplies via the Gdansk terminal and the Polish section of the Druzhba pipeline.

Currently, 70% of Schwedt's oil is supplied via a pipeline from Rostock, with the remainder from Gdansk and the Druzhba pipeline. The federal budget has earmarked 400 million euros for upgrading the Rostock-Schwedt pipeline, awaiting European Commission approval. Amid impending sales of Rosneft's stake, Kellner insisted the refinery would not return to Russian control, emphasizing the need for a stable, long-term ownership structure.

(With inputs from agencies.)