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Germany is considering nationalizing Gazprom and Rosneft units in the country.
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The two Russian energy giants have a significant footprint in Germany.
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Germany, the largest economy in Europe, is highly dependent on Russia for natural gas.
Germany is considering nationalizing the country’s Gazprom and Rosneft units, the business newspaper Handelsblatt reported, citing government sources.
The two Russian energy giants have significant footprints in Europe’s largest economy, with Gazprom Germania operating gas storage facilities and Rosneft Deutschland accounting for a quarter of Germany’s refinery operations, Handelsblatt said.
Berlin is also considering expropriating Gazprom’s assets by forcing the giant to sell its gas storage facilities across Germany, Politico reported Friday, citing a government official and two other people who had been briefed on the plans.
Plans to nationalize Germany’s Gazprom and Rosneft units — which Handelsblatt first reported on Thursday — received approval from the ruling coalition, the daily further reported on Sunday.
“The situation is serious and requires extraordinary measures,” Bernd Westphal, an energy parliamentary faction spokesman for Chancellor Olaf Scholz’s Social Democratic Party, told Handelsblatt.
If the energy companies were nationalized, they would come under the control of the German authorities, easing Russian influence on energy security in Germany and better guaranteeing continuity of supply.
The move comes as Germany wants to bolster the country’s energy security during the war in Ukraine. Last week, Germany activated a contingency plan to deal with natural gas supply disruptions after Russian President Vladimir Putin demanded payment in rubles.
Germany is now in the “early warning phase” of its energy emergency plan, with Berlin urging all consumers – from industry to households – to save energy and reduce consumption. If the situation worsens, the country could start rationing gas in the last of the three-step plan, with industry first in line for power cuts, as outlined by Germany’s economy ministry. The move could devastate the economy and lead to job losses.
Russian gas accounted for 55% of German gas imports in 2021 and 40% of gas imports in the first quarter of 2022, Reuters reported. The country has pledged to end the use of Russian gas by 2024† Economics Secretary Robert Habeck said in a March 25 press release.
Kremlin spokesman Dmitry Peskov has spoken out against reports that Berlin would nationalize Gazprom and Rosneft units, saying this would violate international law, Reuters reported Friday.
No outlier
Germany is not the only country that has considered nationalizing Russian energy resources since the start of the war in Ukraine.
In March, the Financial Times and Bloomberg reported that the UK was preparing to temporarily nationalize Gazprom’s UK retail supply unit as it threatened to collapse and disrupt supplies. The UK’s move appeared to be intended, the FT reported, to save the Gazprom unit itself as customers abandoned it due to the war in Ukraine.
Berlin is also considering restructuring options for Wingas, a division of Gazprom, Bloomberg reported Friday, citing people familiar with the matter. Wingas supplies about a fifth of the German gas market, according to Bloomberg.
Meanwhile, Gazprom announced Friday that it has terminated its participation in Gazprom Germania and all of its assets, including Gazprom Marketing and Trading, S&P Global Commodity Insights reported, citing a statement.
Germany’s Ministry of Economy, Gazprom Germania, and Rosneft Deutschland did not immediately respond to Insider’s requests for comment, which were sent outside normal business hours.
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