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

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

Russian oil has for decades supplied the Schwedt refinery, a former East German combine that survived reunification but may not recover from a freeze on imports of crude oil from Siberian deposits.

“The fear of tomorrow comes very close to that after the fall of the Berlin Wall,” says Buckhard Opitz, summing up the feeling of the 1,200 employees at PCK.

The sixty-year-old, who joined the refinery in 1977, has not forgotten the economic turbulence that accompanied the reunification of Germany in 1990 with its dismantled industrial plants and painful privatizations.

The Schwedt refinery survived despite extensive restructuring because “it was one of the most modern, because we were always at the top,” says Mr. Opitz, local representative of the chemical and energy union IG BCE.

Since Moscow’s offensive in Ukraine, there has been renewed uncertainty in the city near the Polish border.

The plant is well aware that the plant is indispensable, since it supplies around 90 percent of the fuel used in Berlin and the surrounding area, including the kerosene from the airport. This argument is not enough to reassure people.

To make matters worse, the Kremlin-controlled Russian oil giant Rosneft is the majority shareholder of the site.

End of the “normal” world

In the local SPD office, people avoid speaking out “because the fears are big enough”. Many local businesses depend on the refinery’s activity.

Even if the European Union was content on Thursday to decide on an embargo for Russian coal, there will be sanctions against Russian oil and gas “sooner or later”, assured EU Council President Charles Michel.

The industrial park PCK and the refinery Schwedt, in November 2021 in Germany
The industrial park PCK and the Schwedt refinery, in November 2021 in Germany (John MACDOUGALL / AFP)

Germany opposes an immediate embargo on all Russian energies, especially gas. But Berlin wants to gradually free itself from this and practically stop buying Russian oil by the end of the year.

But this oil is the raison d’être of the Schwedt refinery, to which a branch of the world’s longest oil pipeline leads from south-east Russia.

The “Druzhba” pipeline was commissioned in the 1960s to transport crude oil from the USSR to the Eastern Bloc countries. It remains an important source of crude oil for many Central European refineries. “Druzhba” means “friendship” in Russian.

In late 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 who is a target of Western sanctions.

“The world was normal back then. 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, assures AFP.

Today he is convinced: “Without oil from Russia, the Schwedt refinery would have to be shut down. There would be no more petrol or diesel for Berlin, its region or western Poland.”

“Unrealistic”

The federal government has acknowledged that the Schwedt case is complex. The option of temporary nationalization was discussed in the media.

Subsidiaries of the giants Gazprom and Rosneft are important players in Germany's energy infrastructure
Subsidiaries of giants Gazprom and Rosneft are key players in Germany’s energy infrastructure (John MACDOUGALL/AFP/Archives)

This is the recently chosen exceptional measure for the German Gazprom subsidiary that took over Berlin.

Buckhard Opitz sketches a diagram on a corner of paper and ensures that alternatives to Russian oil can be found for the refinery, a metallic monster that stands on the outskirts of the city, a hundred kilometers from Berlin.

A pipeline is coming out of the German port of Rostock that could receive crude oil from other parts of the world, he says. Poland could complete the supply through the port of Gdańsk.

“Unrealistic”, judges Alexander von Gerstoff in view of the logistical difficulties: Rostock cannot accommodate sufficiently large tankers; Poland needs all its skills for its own diversification. And the refineries in East Germany are designed to work with Russian crude oil with special properties.

“Various logistical and technological scenarios” are being studied, the company told AFP.

“The final decision will be political,” says Buckhard Opitz.

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