For decades, crude oil pumped from Russia has been flowing to a giant refinery in the industrial city of Schwedt on the banks of the Oder River in Germany, providing jobs for thousands of workers and a reliable source of gasoline, jet fuel and heating oil for Berliners.
Now, as European Union member states struggle to agree on oil embargo terms To punish Moscow for its invasion of Ukraine, the Schweidt refinery became a major stumbling block in Germany’s efforts to cut its dependence on Russian oil. This prospect sparked concern among the refinery’s 1,200 employees.
Germany relies on Russia for about a third of its oil, and Robert Habeck, the economy minister and vice chancellor, has spent weeks preparing for a ban, cruising from the United Arab Emirates to Washington to Warsaw to fine-tune alternative sources of crude.
“The last third is the problem,” Mr. Habeck said in a video meant to explain the situation to the Germans. Most of that Russian oil comes through the Schweidt refinery.
The refinery is a looming symbol of how closely Germany’s oil and gas needs are linked to the giant energy resource to the East. PCK Refinery – the name is a nod to its East German roots as Petrolchemisches Kombinat, or Petrochemical Combine – is owned by Rosneft, Russia’s state-owned oil company. It is connected to the Soviet-era Druzhba pipeline, one of the longest pipelines in the world, carrying oil from Siberian wells to Western Europe.
It remains an essential part of Germany’s energy needs, producing fuel for Berlin – Germany’s largest city – and neighboring regions, including parts of Poland. Getting enough oil to replace the 12 million tons of crude that is processed each year at Schwedt – via German and Polish ports to the north – is only one piece of the puzzle, because Rosneft has told German officials it has no interest in operating the refinery using unauthorized use. Russian oil.
To tackle this problem, the German parliament last week approved a law that would make it easier for the government to seize essential infrastructure under foreign ownership to prevent a national emergency. Should the oil embargo continue, German officials said the new law would allow Berlin to guarantee an adequate supply of oil products until another company could be found to take over Rosneft’s stake.
coincidenceEurope’s largest energy company, which owns a 37.5 percent stake in BCK, recently said it would support the refinery “even at the cost of economic losses in order to maintain supplies to the region.” Last year, Shell sought to sell its stake in the refinery and Rosneft moved to acquire it, but the German Economy Ministry, which weighs the political and strategic aspects of foreign investment, has not yet approved it.
Another energy company, Alcmene, Part of the privately owned British energy holding company Liwathon Group has expressed interest in investing in Schwedt. “We will be able to provide security of supply and full use of the PCK refinery through German ports” without government support, Al-Kumaini said in an emailed statement.
Chancellor Olaf Schultz made it clear that he was aware of the concerns surrounding the refinery, and considered ensuring its future a priority.
“We are looking closely at how this actually happened,” he said at a recent party meeting in Brandenburg. “We will also make sure that employees are not left alone.”
Fears that layoffs could be around the corner drew hundreds of workers, many in formal PCK fluorescent orange and forest green colors, to the company’s canteen earlier this month for a city council meeting with Mr. Habeck.
Like other regions of the former East Germany, Schwete suffered widespread job losses after the collapse of communism. Memories of 25 per cent unemployment still hang over the region.
In addition, the refinery is not only a source of oil and income, but also the core of the city’s identity. The Soviet Union was settled at the end of World War II, the arrival of the oil pipeline — its name Druzhba, meaning friendship in Russian — and the refinery in the late 1960s attracted thousands of workers and their families, lured by secure jobs. PCK’s motto is: “We move Berlin and Brandenburg!”
Today, nearly a tenth of the city’s 30,000 residents hold secure union jobs in the refinery and in the support industries. Several workers took advantage of the meeting with Mr. Habek to question the government’s approach.
“Why should we take a business partner who for decades has been reliable and always served, and put a ban on them?” A man who introduced himself said he worked at the refinery for 27 years.
“I actually wish I could keep the Druzhba pipeline completely out of the lockdown,” said another employee, who identified herself as a mother of three. “There is no profitable alternative.”
Reporters were asked not to identify the employees who spoke during the event, to protect their privacy.
Mr. Habek tried to reassure the public that the refinery would continue to operate. “If everything works as if it were on paper,” crude oil can be shipped from Norway or the Middle East from the Polish ports of Rostock and Gdansk, both of which are connected to the refinery by pipeline.
At the same time, he admitted that there are several points in the process where you could run into an obstacle.
The PCK facility, like other refineries, is designed to process a specific type of crude oil coming from Russia. Crude oil from other countries must be mixed with oil in reserve tanks on the northwest coast of Germany to create an appropriate blend.
Getting this spare oil to the pipeline in Rostock would require a seven-day journey by sea, because there are no pipelines that cross the former borders that divided East and West Germany, and the country’s main rail shipping company has almost no oil wagons.
Another potential complication: the Polish government refuses to work with Russian entities, and has told German officials that as long as Rosneft has an interest in the refinery, no oil will arrive from Gdansk.
“We can’t be absolutely sure of anything we’re doing,” Mr. Habek told refinery employees. “But at least it’s been thoroughly discussed and thought about.”
Ultimately, Mr. Habeck and local officials would like to see the refinery abandon fossil fuels and focus on processing renewable energy. In recent years, PCK has invested in the development of synthetic fuels with an emphasis on hydrogen. Verbio, a company that produces locally sourced ethanol, is working at the refinery site to feed bioenergy into the city’s heating system.
Berlin officials emphasized the economic attractiveness of the surrounding area, noting the recent completion Tesla assembly plant Intel’s announcement of a Chip-making facilities worth $19 billion. Carsten Schneider, Schulz’s Coordinator for the East, said the two companies were attracted by an abundance of renewable energy. Germany, who also spoke to Schwedt residents.
“I assured them that the German government would not only abandon them, but would make an effort, both for a short-term solution to secure oil from elsewhere and long-term restructuring towards renewable energy production,” he said.
The city’s mayor, Annekathrin Hoppe, said she would like to establish a campus for startups, incubators and other energy innovators near the refinery to promote the transition to green energy production. But she said it would require “amounts in the millions or billions”.
Despite all the attention politicians from Berlin have paid to her city, she said she has yet to see a timeline or any concrete guarantees that people will be able to keep their jobs, or any pledges of financial assistance.
“It was a good start,” she said of the flurry of visits in the past weeks. “But it was just the beginning.”
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