German court upholds move to take control of Rosneft units

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Andrew Feinberg

White House Correspondent

A German federal court on Tuesday upheld a government decision last year to put two subsidiaries of Rosneft under the control of German authorities, throwing out complaints from the Russian oil giant.

The Federal Administrative Court found that the decision in mid-September to put Rosneft Deutschland GmbH and Rosneft Refining and Marketing GmbH under the administration of Germany’s Federal Network Agency was lawful.

The trusteeship, which was initially imposed through March 15, gave German authorities control of three Russian-owned refineries in Germany.

Rosneft accounted at the time for about 12% of Germany’s oil refining capacity, importing oil worth several hundred million euros (dollars) every month, according to the German government.

Chancellor Olaf Scholz said in September that the government was “ensuring that Germany is supplied with oil in the medium and long term as well.” He said that was particularly true of a refinery at Schwedt, on the Polish border northeast of Berlin, which provides petroleum products for the capital and much of northeastern Germany.

The complaints against the move faulted the government for going ahead without a previous hearing, argued that insufficient reason was given for it and that it was disproportionate.

The court found that, in the circumstances, the government wasn't obliged to give Rosneft a hearing before acting. It said that indications of a possible withdrawal of capital backed fears that the subsidiaries could collapse — a scenario that the government already had moved to avoid with gas company Gazprom's former German unit by taking control of that.

Germany later nationalized the former Gazprom unit, which has been renamed Securing Energy for Europe.

Germany's Economy Ministry welcomed Thursday's court ruling and said it plans to extend the trusteeship for the Rosneft subsidiaries for another six months.

Economy Ministry Robert Habeck said in a statement that the verdict is “good news for the security of supply” and for the Schwedt refinery.