Russia, Kazakhstan discuss sale of Rosneft's stake in German refinery, pumping more oil via CPC, transit to third countries
ASTANA. Nov 28 (Interfax) - Russia and Kazakhstan have discussed the possibility of selling Rosneft's stake in the Schwedt refinery in Germany so that Kazakhstan can supply crude there directly, as well as pumping more oil from Kazakhstan through the Caspian Pipeline Consortium system and increasing the supply of Russian oil and gas through Kazakhstan to third countries, Russian President Vladimir Putin told journalists at the end of his visit to Astana.
"We discussed the possibility of increasing the pumping of Kazakh oil through the CPC [system] to the port of Novorossiysk and the further shipping of Kazakh oil to global markets. But it's not only Kazakh oil; many foreign companies also operate there. So, one could say it's oil from Kazakhstan, but it's still an international product," he said.
"The possible sale of Rosneft's stake in the German refinery, Schwedt, so that Kazakhstan itself could supply oil for processing at the refinery, has been discussed on several occasions," Putin said.
He said this was a matter for negotiations, but the behavior of the German government looks like a "seizure of assets."
"You know, everything is possible. The only thing that seems unacceptable to us is the use of illegal methods against the Russian company, Rosneft, by the German government, which looks like nationalization and seizure of assets, sidelining it from management," Putin said.
"We also discussed the possibility of establishing new routes for pumping our products, oil and gas, to third countries, primarily to the People's Republic of China, including through or across the territory of Kazakhstan. These are very profitable, interesting routes, and promising projects," Putin said.
Putin said this would assist in stabilizing the global economy, primarily in the Asia-Pacific region, and would allow Russia additional access to energy markets.
Germany is extending trusteeship over local Rosneft subsidiaries Rosneft Deutschland GmbH and RN Refining & Marketing GmbH for the fourth time. As reported, in September 2023, the government put Rosneft Deutschland GmbH (RDG) and RN Refining & Marketing GmbH (RNRM) into trust management on the basis of an energy security law. This decision has been extended several times - it is currently valid until March 10, 2025. The Federal Network Agency thereby gained control over a subsidiary of Rosneft and its stakes in three oil refineries: PCK Raffinerie (Schwedt), MiRo (Karlsruhe) and Bayernoil (Vohburg).
Rosneft Deutschland accounts for about 12% of German oil refining capacity and is one of the largest players in the local fuel market.
The German said it did this to ensure undisrupted oil supplies to the country amid an unprecedented energy crisis due to the conflict in Ukraine. The reasons for putting the assets into trusteeship included the fact that key suppliers of critical services, such as insurance companies, IT firms and banks, as well as clients, were no longer willing to work with Rosneft and the German enterprises and organizations belonging to it. The sanctions imposed since the beginning of the conflict in Ukraine affected not only individual Russian companies, but also whole sectors: for example the EU introduced strict restrictions on oil imports from Russia.
Rosneft, which insists it has honored its commitments to supply crude to the refineries in full, tried to challenge the decision by the German government, which plans to sell these assets, but the court rejected its claim a year ago.
The European Union banned imports of Russian oil with a number of exceptions from December 5, 2022.
Kazakhstan began supplying oil to Germany via the Druzhba pipeline in February 2023. Magzum Mirzagaliyev, then head of oil and gas company KazMunayGas (KMG), said Kazakh oil would be sent to the refinery in Schwedt. Deliveries, carried out in transit through Russia, came to just under 1 million tonnes in 2023; Kazakhstan used its 2024 quota of 1.2 million tonnes in January-October and wants to increase the deliveries to 1.4 million tonnes, then to 2.5 million tonnes in 2025.