The Russian oil of “friendship”, cumbersome legacy of a German refinery

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The PCK refinery in Schwedt, east of Berlin, on April 2, 2022 ( John MACDOUGALL / AFP/Archives )

Russian oil has been supplying the Schwedt refinery for decades, a former East German combine that survived reunification but may not recover from a halt in imports of crude from Siberian deposits.

“The fear of tomorrow is very close to what it was after the fall of the wall”, describes Buckhard Opitz to sum up the feeling of the 1,200 employees of the PCK company.

Joined the refinery in 1977, this sexagenarian has not forgotten the economic turbulence that accompanied the reunification of Germany in 1990 with its procession of dismantled industrial sites and painful privatizations.

The Schwedt refinery survived, subject to severe restructuring, because “it was one of the most modern, because we have always been on top”, says Mr. Opitz, local representative of the chemical and energy union. IG BCE.

Since the offensive launched by Moscow in Ukraine, uncertainty has once again gripped the town located near the Polish border.

The plant may well know that it is essential, since it provides around 90% of the fuel and combustible consumed in Berlin and its region, including the kerosene from the airport, the argument is not enough to reassure.

To complicate the equation, the Russian oil giant Rosneft, controlled by the Kremlin, is the majority shareholder of the site.

End of the “normal” world

At the local office of the Social Democratic Party (SPD), people avoid speaking out “because the fears are already great enough”. Many local businesses depend on the refinery’s activity.

Even if the European Union was content on Thursday to decide on an embargo on Russian coal, sanctions on Russian oil and gas will come “sooner or later”, assured the President of the European Council Charles Michel.

The PCK industrial park and the Schwedt refinery, in November 2021 in Germany
The PCK industrial park and the Schwedt refinery, in November 2021 in Germany (John MACDOUGALL / AFP)

Germany refuses an immediate embargo on all Russian energies, notably gas. But Berlin wants to gradually free itself from it and virtually stop its purchases of Russian oil by the end of the year.

But this oil is the raison d’être of the Schwedt refinery where a branch of the longest oil pipeline in the world leads from south-eastern Russia.

The “Druzhba” pipeline was put into service in the 1960s to transport crude from the USSR to the countries of the Eastern bloc. It remains a vital source of crude for many Central European refineries. “Druzhba” means “friendship” in Russian.

At the end of 2021, Rosneft announced its intention to increase its stake in the PCK refinery from 54 to 92%, by buying its shares from Shell. The Russian group is chaired by Igor Setchin, an oligarch close to Vladimir Putin targeted by Western sanctions.

“The world was still normal at the time. There was no reason to refuse Russian participation, just as there were German participations in Russia”, assures AFP Alexander von Gersdorff, spokesman for the German Petroleum Industry Association En2x.

Today he is convinced: “Without oil from Russia, the Schwedt refinery would have to be taken out of service. There would be no more petrol or diesel for Berlin, its region or Western Poland”.

“Unrealistic”

The German government has acknowledged that Schwedt’s case is complex. The option of temporary nationalization has been mooted in the media.

Subsidiaries of giants Gazprom and Rosneft are key players in Germany's energy infrastructure
Subsidiaries of giants Gazprom and Rosneft are key players in Germany’s energy infrastructure (John MACDOUGALL/AFP/Archives)

This is the exceptional measure chosen recently for the German subsidiary of Gazprom, of which Berlin has taken control.

Sketching a diagram on a corner of paper, Buckhard Opitz ensures that alternatives to Russian oil can be found for the refinery, a metallic monster that stands at the exit of the city, a hundred kilometers from Berlin.

A pipeline comes from the German port of Rostock, which could receive crude from other parts of the world, he says. Poland could complete the supply via the port of Gdansk.

“Unrealistic”, judges Alexander von Gerstoff, taking into account the logistical difficulties: Rostock cannot accommodate sufficiently large tankers; Poland needs all its capabilities for its own diversification. And the refineries in eastern Germany have been designed to work with Russian crude, with particular characteristics.

“Different logistical and technological scenarios” are being studied, the company told AFP.

“The final decision will be political,” says Buckhard Opitz.

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