Germany Extends Control Over Rosneft's Local Units Amid Qatar Sale Talks

The German government has extended its trusteeship over local units of Rosneft until March 10 next year, anticipating a potential sale of the assets to Qatar. Rosneft's German activities include substantial stakes in major refineries, with the sale viewed as a secure way to enable further investments.

The German government has prolonged its trusteeship of Rosneft's local units until March 10 next year, as it anticipates a possible sale of the assets to Qatar, the economy ministry confirmed on Monday.

This formal announcement corroborates an earlier report by Reuters about the decision. The future of Rosneft's German assets, including its 54.17% stake in the PCK Schwedt refinery, remains uncertain after Berlin took control of them following Russia's invasion of Ukraine.

The trusteeship, which allows Germany to manage the assets while Rosneft retains ownership, has already been extended three times to protect supply chains and provide Rosneft time to identify a buyer. The Russian oil giant's assets in Germany, valued at around $7 billion, also include stakes in MiRo and Bayernoil refineries.

"Rosneft Russia has credibly stated that a sale of Rosneft Germany is actively being pursued and should be completed by year-end," the ministry stated, noting that the sale is the most secure and swift way to facilitate investments in the refineries.

Rosneft was not immediately available for comments. A knowledgeable source mentioned that the trusteeship extension aims to allow Rosneft to negotiate a sale with Qatar, which has a history of investments in Germany. Due diligence is ongoing, but finalizing the deal may take time.

Last week, the German government confirmed it had regular discussions with Qatar over potential investment opportunities in recent months but did not specify if these included Rosneft assets. The PCK Schwedt refinery is co-owned by Shell and Eni. In December, Shell announced selling its 37.5% stake in the refinery to the Prax Group, subject to legal dispute in the Higher Regional Court of Duesseldorf.

Shell had projected the deal to close by the first half of 2024 but refrained from commenting further. The Prax Group also declined further comments until all regulatory processes are finalized.

Under Germany's energy security law, Berlin could opt to expropriate Rosneft Germany's assets if no sale agreement is reached, following the precedent set with Gazprom's local assets in 2022.

(With inputs from agencies.)