For decades, crude oil from Russia has flowed into a giant refinery in Schwedt, a industrial city on the banks of the river Oder in Germany, providing employment for thousands of workers and a reliable source of gasoline, jet fuel and heating oil for Berliners.
Now, as the member states of the European Union struggle to agree on terms of the oil embargo To punish Moscow for its invasion of Ukraine, the Schwedt refinery became a major obstacle in Germany’s efforts to cut its dependence on Russian oil. The outlook has raised alarms among 1,200 refinery employees.
Germany depends on Russia for about a third of its oil, and Robert Habeck, Economy Minister and Deputy Chancellor, has spent weeks preparing the embargo, from the United Arab Emirates to Washington to Warsaw to arrange alternative crude supplies.
“The last third is the problem,” Habeck said in a video intended to explain the situation to the Germans. And most of Russia’s oil goes through the refinery in Schwedt.
The refinery is a stark symbol of how Germany’s oil and gas needs are tied to the giant energy exporter to the east. The PCK refinery – the name is derived from East Germany as the state-owned “Petrolchemisches Kombinat”, or Petrochemical Complex – is owned by Rosneft, Russia’s state-owned oil and gas company. It is connected to the Soviet-era Druzhba pipeline, one of the longest in the world, bringing oil from wells in Siberia to Western Europe.
And it remains an essential part of Germany’s energy needs, producing fuel for Berlin – Germany’s largest city – and surrounding regions, including parts of Poland. Sourcing enough oil to replace the 12 million tonnes of crude that is processed each year in Schwedt – via German and Polish ports to the north – is only one piece of the puzzle, because Rosneft has told reporters. German officials that they are not interested in operating the refinery using non-Russian oil.
To address that, Germany’s parliament last week passed a law making it easier for the government to capture foreign-owned essential infrastructure to avert a national emergency. If the oil embargo is passed, German officials say the new law will allow Berlin to ensure a sufficient supply of oil products until another company is found to buy Rosneft’s shares.
Cover, Europe’s largest energy company, which holds a 37.5% stake in PCK, recently said that it would support the refinery, “even at the cost of economic damage to maintain the oil source.” supply to the region.” Last year, Shell sought to sell its stake in the refinery and Rosneft moved to acquire the plant, but the German Economy Ministry, which considers the political and strategic aspects of the investments foreign investment, not yet approved.
Another energy company, Alcmene, part of the British private energy company Liwathon Group, has expressed interest in investing in Schwedt. “We are able to guarantee the supply and full utilization of the PCK refinery through German ports” without government subsidies, Alcmene said in an emailed statement.
Prime Minister Olaf Scholz has made it clear that he is aware of the concerns surrounding the refinery and makes securing its future a priority.
“We are looking very closely at how this can actually play out,” he said at a recent meeting of his party in Brandenburg state. “We will also make sure that employees are not left unattended.”
Fears that layoffs could be imminent drew hundreds of workers, many dressed in PCK’s official fluorescent orange and forest green, to the company’s canteen earlier this month for a meeting. meeting at town hall with Mr. Habeck.
Like other areas of former East Germany, Schwedt suffered widespread job losses after the fall of communism. The memory of 25% unemployment still haunts the region.
In addition, the refinery is not only a source of oil and income, it is also the core of the city’s identity. Leveled by the Soviet Union at the end of World War II, the arrival of the oil pipeline – its name, Druzhba, means friendship in Russian – and the refinery in the late 1960s attracted thousands of people. thousands of workers and their families, attracted by secure jobs. PCK’s slogan is: “We move Berlin and Brandenburg!”
Today, about a tenth of the city’s 30,000 residents hold guaranteed union jobs in refineries and ancillary industries. Many workers used the meeting with Mr. Habeck to question the government’s approach.
“Why should we take a business partner that for decades have been reliable and consistently deliver, and slap them with an embargo?” said a man who claimed to have worked at the refinery for 27 years.
“My wish is really to keep the Druzhba pipeline completely free from the embargo,” said another employee, who identifies herself as a mother of three young children. “There are no beneficial alternatives.”
Reporters asked not to identify employees who spoke at the event, to protect their privacy.
Mr. Habeck tried to assure the crowd that the refinery would continue to operate. “If everything works on paper,” crude oil from Norway or the Middle East can be shipped from the ports of Rostock and Gdansk, Poland, both of which are connected to the refinery by pipeline.
At the same time, he admits, there are points in the process where things can go wrong.
The PCK facility, like other refineries, is designed to process specific crude oil coming from Russia. Crude oil coming from other countries would have to be mixed with oil stored in storage tanks on Germany’s northwest coast to create a suitable blend.
To get that stockpile to the pipeline in Rostock would require a seven-day journey by sea, because no pipeline crosses the line that formerly divided East and West Germany, and the cargo operator operates the road cargo. The country’s main ironworks have almost no oil wagons.
Another potential complication: The Polish government is refusing to work with Russian entities, and it has told German officials that as long as Rosneft is interested in the refinery, there will be no oil. from Gdansk.
“We can’t be absolutely certain of anything we’re doing,” Habeck told refinery workers. “But at least it’s been thoroughly discussed and thought through.”
Ultimately, Mr. Habeck and local officials would like to see the refinery abandon fossil fuels and focus on renewable energy processing. In recent years, PCK has invested in the development of synthetic fuels with a focus on hydrogen. Verbio, a company that produces ethanol from local sources, has been operating on the site of the refinery, feeding bioenergy into the city’s heating system.
Officials in Berlin emphasized the economic attractiveness of the surrounding area, pointing out that Tesla Assembly Plant and Intel’s announcement of a $19 billion chip manufacturing facility. Carsten Schneider, Chancellor Scholz’s liaison to the east, said both companies were attracted by the abundance of renewable energy. Germany, who also spoke to the residents of Schwedt.
“I assure them that the German government will not abandon them but will work, both for a short-term solution to secure oil from somewhere else and for a long-term restructuring towards production,” he said. recycled energy.
The city’s mayor, Annekathrin Hoppe, has said she wants to set up a campus for startups, incubators and other energy innovators near the refinery to accelerate the transition to energy production. green quantity. Still, she said, that would require “millions or billions of dollars.”
Despite all the attention politicians from Berlin have given 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 commitment of financial support.
“It was a good start,” she said of the flood of visits over the past weeks. “But that’s just a start.”
