Shell revives German refinery sale as Russian ownership cleared

By and
A view shows a logo of Shell petrol station in South East London
A view shows a logo of Shell petrol station in South East London, Britain, February 2, 2023. REUTERS/May James

WARSAW/LONDON, March 21 (Reuters) - Shell oil refinery outside Berlin after the German government last year took control of the plant from its Russian operator, industry sources told Reuters.

The British company's efforts to sell its 37.5% stake in the refinery, Germany's fourth-largest which supplies 90% of Berlin's fuel, were scuppered by uncertainty over the future of the refinery in the wake of Russia's invasion of Ukraine last February.

The sale's relaunch was made possible after the German economy ministry last September put the German unit of state Russian oil giant Rosneft (ROSN.MM) under a trusteeship as part of a wave of European sanctions on Russia following Moscow's invasion of Ukraine, the two sources said.

That included Rosneft's 54.17% of the Schwedt refinery. A German court last week threw out an appeal by Rosneft over the move.

Shell this week opened a data room for potential buyers with information on the refinery's operations, costs and revenues, the two source said.

A Shell spokesperson declined to comment. Germany's Economy Ministry declined to comment.

Polish refiner PKN Orlen (PKN.WA) had previously been interested in taking a controlling stake in the Schwedt refinery, which also supplies parts of western Poland, sources in Berlin and Warsaw who were familiar with the matter told Reuters in September.

The refinery has been forced to operate at a reduced rate of around 60% in recent months as it struggles to replace crude oil supplies that were delivered from Russia via the Druzhba pipeline which were halted as part of the EU sanctions.

Most new supplies have come from the German port of Rostock and the government wants to raise that by supplying the refinery with crude imported through the Polish port of Gdansk.

In 2021, Shell tried to sell its stake to Vienna-based Alcmene but the move was pre-empted by Rosneft, which sought to increase its 54% stake. That move was put on hold by the German government last March.

Italy's Eni (ENI.MI) owns 8.33% of the refinery.

Additional reporting by Riham Alkousaa in Berlin; Editing by Bernadette Baum

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Ron has covered since 2014 the world’s top oil and gas companies, focusing on their efforts to shift into renewables and low carbon energy and the sector's turmoil during the COVID-19 pandemic and following Russia's invasion of Ukraine. He has been named Reporter of the Year in 2014 and 2021 by Reuters. Before Reuters, Ron reported on equity markets in New York in the aftermath of the 2008 financial crisis after covering conflict and diplomacy in the Middle East for AFP out of Israel.