Russia’s “Friendship” oil, a stressful legacy of a German refinery

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

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

“The fear of tomorrow is much closer than it was after the fall of the wall,” Bookard describes Opitz to sum up the feeling of 1,200 PCK employees.

After joining the refinery in 1977, this sexist did not forget the economic turmoil that accompanied German reunification in 1990 with its procession of dismantled industrial sites and painful privatizations.

Schwedt’s refinery survived, having undergone a severe restructuring, because “it was one of the newer, because we were always on top”, says Mr. Opitz, the local representative of the chemical and energy consortium IG BCE.

Since the attack by Moscow in Ukraine, uncertainty once again reigned in the city near the Polish border.

The plant may well know that it is necessary, given that it saves about 90% of the fuel and combustibles consumed in Berlin and its region, including kerosene from the airport, the argument is not enough for reassurance.

To complicate the equation, Russian oil giant Rosneft, which is controlled by the Kremlin, is the largest shareholder in the site.

The end of the ‘normal’ world

In the local SPD office, people avoid speaking out “because the concerns are already big enough”. Many local companies depend on the refinery’s activity.

European Council President Charles Michel stressed that even if the European Union was satisfied Thursday with a decision on a ban on Russian coal, sanctions on Russian oil and gas would come “sooner or later”.

PCK Industrial Park and Schwedt Refinery, in November 2021 in Germany
The PCK industrial complex and Schwedt refinery, in November 2021 in Germany (John MACDOUGALL / AFP)

Germany rejects an immediate ban on all Russian energies, especially gas. But Berlin wants to gradually free itself from it and practically stop its purchases of Russian oil by the end of the year.

But this oil is the reason for the existence of the Schwedt refinery, as it is driven by a branch of the longest oil pipeline in the world from southeast Russia.

The Druzhba pipeline began operating in the 1960s to transport crude oil from the Soviet Union to the countries of the Eastern Bloc. It is still a vital source of ore for many Central European refineries. The word “Drogba” in Russian means “friendship”.

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

“The world was still normal at that time. There was no reason to reject Russian participation, just as there were German participations in Russia,” Alexander von Gersdorff, spokesman for the German Petroleum Industry Association N2X emphasized.

Today he is convinced: “Without oil from Russia, the Schwidt refinery would have had to be taken out of service. There would be no more gasoline or diesel in Berlin, its region, or in western Poland.”

“unrealistic”

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

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

This is the exceptional measure recently chosen for a subsidiary of the German company Gazprom, which was controlled by Berlin.

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

He adds that a pipeline comes from the German port of Rostock, which can receive crude from other parts of the world. Poland can supplement the supply through the port of Gdansk.

“Unrealistic,” Alexander von Gerstof judges, given the logistical difficulties: Rostock could not accommodate sufficiently large tankers; Poland needs all its capabilities for its own diversification. And refineries in eastern Germany are designed to work with Russian crude with certain characteristics.

The company told AFP that it was studying “different logistical and technological scenarios”.

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

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