- Germany is considering nationalizing Gazprom and Rosneft units in the country.
- The two Russian energy giants have a significant footprint in Germany.
- Germany, Europe’s largest economy, is heavily reliant on Russia for natural gas.
Germany is considering nationalizing Gazprom and Rosneft units in the country, business newspaper Handelsblatt reported, citing government sources.
The two Russian energy giants have a significant footprint in Europe’s largest economy, with Gazprom Germania running gas-storage facilities and Rosneft Deutschland accounting for one-quarter of Germany’s refinery business, per Handelsblatt.
Berlin is also considering expropriating Gazprom assets by forcing the giant to sell its gas-storage facilities across Germany, Politico reported on Friday, citing a government official and two other people briefed on the plans.
Plans to nationalize Gazprom and Rosneft units in Germany — which Handelsblatt first reported on Thursday — were met with approval from the ruling coalition, the business daily further reported on Sunday.
“The situation is serious and requires extraordinary measures,” said Bernd Westphal, an energy parliamentary group spokesperson from Chancellor Olaf Scholz’s Social Democrats party, per Handelsblatt.
If the energy companies were nationalized, they would come under the control of German authorities, thereby loosening Russian influence on energy security in Germany and better ensuring supply continuity.
The move comes as Germany seeks to bolster the country’s energy security amid the Ukraine war. Last week, Germany activated an emergency plan to deal with disruptions to its natural-gas supply after Russian President Vladimir Putin demanded payment in rubles.
Germany is now in the “early warning phase” of its energy emergency plan, with Berlin calling for all consumers — from industry to households — to conserve energy and reduce consumption. If the situation worsens, the country may start rationing gas in the last of the three-stage 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 Germany’s gas imports in 2021 and 40% of its gas imports in the first quarter of 2022, Reuters reported. The country has pledged to end the use of Russian gas by 2024, economy minister Robert Habeck said in a March 25 press release.
Kremlin Spokesman Dmitry Peskov has spoked out against reports that Berlin may nationalize Gazprom and Rosneft’s units, saying it would be against international law, Reuters reported on Friday.
Not an outlier
Germany is not the only country that has considered nationalizing Russian energy assets since the war in Ukraine began.
In March, the Financial Times and Bloomberg reported that the UK was preparing to temporarily nationalize Gazprom’s British retail supply unit, as it was in danger of collapsing and causing supply disruption. The UK’s move appeared to be designed, the FT reported, to save Gazprom itself as customers abandoned it over the war in Ukraine.
Berlin is also considering restructuring options for Wingas, a unit of Gazprom, Bloomberg reported on Friday, citing people familiar with the matter. Wingas supplies about one-fifth of the German gas market, per Bloomberg.
Meanwhile, Gazprom announced on Friday 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 economy ministry, Gazprom Germania, and Rosneft Deutschland did not immediately respond to Insider’s requests for comment, which were sent outside regular business hours.
Read More: Germany Considering Nationalizing Units of Russia’s Gazprom, Rosneft