Schwedt refinery struggles without Russian oil

Germany's PCK Schwedt refinery is still running three years after it stopped relying on Russian oil, but its managers and workers say new supply routes, sanctions risks and unresolved ownership questions are creating uncertainty.

The refinery, about 100 kilometres north of Berlin, supplies more than 90 percent of the petrol, diesel, kerosene and heating oil used in Berlin and Brandenburg, including an international airport. It has about 1,200 employees.

After Russia's full-scale invasion of Ukraine in 2022, Germany placed the local unit of Russian state-owned Rosneft under state trusteeship. Rosneft still owns 54 percent of the refinery's capital.

PCK initially used Kazakh crude transported through Russia after Russian oil stopped flowing. Moscow halted those supplies in May, citing technical difficulties. The refinery has since increased deliveries through the Baltic Sea ports of Rostock in Germany and Gdansk in Poland and is operating at 80 percent of capacity.

Managing director Ralf Schairer said the site needs infrastructure modernisation, especially the link with Rostock. He said Brussels has not authorised 400 million euros in aid applied for in 2023 while Rosneft remains the majority owner.

Germany's Die Linke party has called for the state to take over the refinery entirely, but Berlin fears full nationalisation could draw reprisals from the Kremlin.

Works council chairman Danny Ruthenberg said the ownership dispute was causing "real uncertainty" among employees. He said some US software companies working with the refinery had announced withdrawals for fear of sanctions after a US sanctions announcement against Rosneft last October, although Berlin negotiated an exemption with Washington for Rosneft's German subsidiaries.

Schairer also said the positions of the refinery's other shareholders, Shell and Eni, were complicating investment plans for a possible shift toward synthetic fuels based on hydrogen. Shell wants to sell its 37.5 percent stake, while Eni owns eight percent.

Schwedt mayor Annekathrin Hoppe said trust in the German government had eroded in the town since the start of the Ukraine war. Asked whether Russian crude could return if the war ended, she said she had little hope because "too many bridges have been burned."