RNFTF - Germany taking over key energy assets in face of new supply threats

Things are coming thick and fast as Germany attempts to avoid a collapse of its energy market. The government is now looking to take control of some domestic players to ensure key supplies following a sanctions war sparked by Russia's invasion of Ukraine. Flows across the Nord Stream 1 pipeline have been cut off, while a crude import ban will go into effect later this year, threatening power stations, factories and even the heating of homes.

The latest: Germany has already conducted a series of government bailouts and rescue loans for energy firms, but the need to source alternative supplies is racking up losses of hundreds of millions of euros per day. Controlling stakes and further capital injections seems like the only way out of the bind, with an outright nationalization of key energy assets even on the table. "Things are complex, we are working it through very carefully," declared German Economy Minister Robert Habeck.

In the latest move, Berlin said it would take over Rosneft's ( OTC:RNFTF ) German unit, including stakes in three crude refineries that account for 12% of the country's oil processing capacity. The subsidiary of the Russian oil giant was placed under trusteeship on Friday, giving it federal regulatory control of the facilities in Schwedt, Karlsruhe and Vohburg. The move was executed through the German Energy Safety Act and can be renewed every six months.

Outlook: Germany is also in advanced talks to take state ownership of Uniper ( OTC:UNPPY ) and two other large gas importers known as VNG and Securing Energy for Europe (formerly Gazprom Germania). The three are central pillars of the country's critical infrastructure, managing, storing and directing flows. Teams of traders at the companies also buy and sell billions in energy contracts each year to keep the market humming and stable.

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