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

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

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

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

Entered 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 at the top,” says Mr. Opitz, local representative of the IG BCE chemical and energy union.

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

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

To complicate the equation, the Kremlin-controlled Russian oil giant Rosneft is the site’s majority shareholder.

End of the “normal” world

In the local office of the Social Democratic Party (SPD), people avoid speaking “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”, European Council President Charles Michel said.

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 rejects an immediate embargo on all Russian energy, particularly gas. But Berlin wants to gradually free itself from it and practically stop its purchases of Russian oil before the end of the year.

But this oil is the raison d’être of the Schwedt refinery, where a branch of the world’s longest oil pipeline leads from southeastern Russia.

The “Druzhba” pipeline was put into service in the 1960s to transport crude oil from the USSR to the countries of the Eastern bloc. It remains a vital source of crude oil for many refineries in Central Europe. “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 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 Oil Industry Association En2x, told AFP.

Today he is convinced: “Without Russian oil, the Schwedt refinery would have to go out of service. There would be no more gasoline 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 discussed 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/Files)

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

Drawing a diagram in the corner of a piece of paper, Buckhard Opitz says that alternatives to Russian oil can be found for the refinery, a metal monster that stands on the outskirts of the city, a hundred kilometers from Berlin.

An oil pipeline runs from the German port of Rostock that could receive crude from other parts of the world, he says. Poland could complete the supply through the port of Gdansk.

“Unrealistic”, judges Alexander von Gerstoff, taking into account the logistical difficulties: Rostock cannot accommodate large enough 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.

Leave a Comment